[Click eStock] "Korea Kolmar Stock Price Correction Is Excessive"

On the 28th, NH Investment & Securities evaluated that Korea Kolmar continues to benefit from favorable industry conditions but has experienced excessive stock price adjustments. Accordingly, they maintained a 'Buy' investment rating and a target price of 74,000 KRW.

Jiyoon Jeong, a researcher at NH Investment & Securities, stated, "As of the first quarter, order trends on a separate basis exceed last year's by 30%," adding, "Direct export sales increased by 53% compared to last year due to new product launches by global brands, expansion of supply chains in Asia, and the opening of export channels for indie brands."

Last year's fourth-quarter performance met consensus when considering the increase in performance bonuses (+3.5 billion KRW). On a consolidated basis, sales rose 15% year-on-year to 551.6 billion KRW, and operating profit surged 338% to 37.8 billion KRW. However, Jeong pointed out, "It is regrettable that a net loss of 46.5 billion KRW was recorded due to non-operating items such as goodwill impairment related to Yeonwoo and impairment losses on tangible assets in the United States."

Jeong highly evaluated the structural changes occurring in the domestic business. He analyzed, "From the fourth quarter, the normalization of SAP (enterprise ERP software) operations has led to shipments for existing top 2 major customers and stable orders from indie customers, gradually strengthening the proportion of top customers (on a separate basis), which is positive."

The overseas business showed mixed results depending on the region. In the United States, sales increased by 84% year-on-year due to stable orders centered on lip products from the top indie customer. However, in Canada, Jeong diagnosed that prolonged inventory adjustments by major customers have slowed sales recovery more than expected, and fixed costs have not yet been offset.