[Featured Stock] Cheongdam Global, Silicon Two of China... Platform Sales Growth Expected Due to K-Beauty Popularity

Cheongdam Global is showing strong performance. It appears that the analysis predicting improved profitability through the activation of domestic brand distribution and increased sales on the B2C live commerce platform is influencing the stock price. Cheongdam Global is an e-commerce company that provides a one-stop total solution to help beauty & life products with high growth potential establish themselves as successful brands by distributing, marketing, and branding them in global markets such as China, the United States, Europe, and Southeast Asia, based on a global network including the mega global platform. Interest in Cheongdam Global is growing as domestic brand cosmetics gain popularity overseas and the live commerce market expands.

When Cheongdam Global went public in 2022, it selected three comparable companies?Brand X Corporation, Silicon2, and Revolve Group, Inc.?to calculate its corporate value.

As of 10:16 AM on the 13th, Cheongdam Global was trading at 10,030 KRW, up 1,360 KRW (15.69%) from the previous trading day.

Cheongdam Global, established in 2017, is an e-commerce company. It acts as a primary vendor for leading Chinese platforms such as JD.com, distributing products including cosmetics. Based on consumer big data analysis, it provides comprehensive solutions encompassing consulting, marketing, and distribution to brand companies aiming to enter the global market.

In the first quarter, consolidated sales reached 54.8 billion KRW, operating profit was 2.4 billion KRW, and the operating profit margin was 4.4%. Distribution segment sales were 41.7 billion KRW with an operating profit of 1 billion KRW. The cosmetics segment saw a decline in sales from JD.com, which had previously accounted for a high sales dependency, due to diversification of distribution channels within China (TikTok, Kuaishou, Xiaohongshu, etc.). Despite the sales decrease, the operating profit margin improved by 1.3 percentage points, reflecting the effect of an increased proportion of domestic cosmetics sales. Biovizju (filler manufacturing and sales) recorded sales of 6.4 billion KRW and operating profit of 2.6 billion KRW. Baishuco posted sales of 2 billion KRW and an operating loss of 900 million KRW.

Shinae Park, a researcher at KB Securities, explained, "In 2024, the distribution segment will pursue external growth through activation of domestic brand distribution and expansion of B2C live commerce platform sales," adding, "We plan to strengthen marketing capabilities by building networks with influencers." She continued, "The subsidiary Biovizju plans to list on the KOSDAQ market in the first half of 2025," and added, "Cheongdam Global acquired 100% of Idol Store's shares last January to enter the idol goods market, which is growing annually thanks to the rise of K-pop."

Since its establishment in 2021, the platform has accumulated 300,000 registered users within three years and is preparing its first offline store in Hongdae. The risk factors include high sales dependency on a single country (China), channel (JD.com), and category (cosmetics), and "there is some volatility in performance during the business diversification process to address these issues," she said.