[Click eStock] "CNC International, Continuous Positive Cycle Maintained"

On the 9th, Kiwoom Securities forecasted that CNC International will continue to experience a virtuous cycle of increasing orders and expansion of production capacity (CAPA).

CNC International's first-quarter sales amounted to 72.1 billion KRW, and operating profit was 9.9 billion KRW, representing growth of 56% and 66% respectively compared to the same period last year. The operating profit margin was 13.7%. While orders from customers across all regions remained robust, lip product orders particularly outperformed in domestic customers and product categories by region.

Researcher Sojeong Jo of Kiwoom Securities stated in the report, “Sales growth rates by major regions (customers) were domestic +105%, Europe +85%, Asia +27%, and North America +8%. Among these, domestic, which holds the largest share, saw a significant increase in orders as demand for export volumes from major customers rose, while North America showed slight growth due to a core product transition strategy by key customers.”

Researcher Jo explained, “Sales from the Chinese subsidiary were 3.5 billion KRW, and operating profit was 0.5 billion KRW, down 31% and 73% respectively compared to the same period last year. This was due to a decrease in order requests from existing major customers and delays in delivery schedules from new customers.”

He added, “This year, consolidated sales of 336.8 billion KRW and operating profit of 52.4 billion KRW are expected, representing increases of 53% and 64% year-on-year. Firstly, the company’s domestic customers are actively driving growth in the Japanese color cosmetics market, so demand for export volumes is likely to continue rising.”

He also anticipated, “North American customers are expected to show noticeable growth as they switch their main products to blushers starting in the second half of the year. In Europe, demand from prestige customers is expected to steadily increase.”

Furthermore, he analyzed, “The recent CAPA shortage is also expected to gradually be resolved. Starting from the second quarter, the leased 4th factory is scheduled to begin operations, which will increase annual production capacity by 60 million units. From the fourth quarter, with the completion of the expansion of the existing 2nd factory, the annual production capacity is expected to significantly increase to 100 million units.”