Achieved Record Quarterly Sales in Q1 This Year
Increased Demand for Indie Brand Cosmetic Containers
Performance Improvement Trend to Continue for the Time Being
K-beauty is gaining popularity worldwide, including in the United States and Japan. The scale of cosmetic exports is steadily growing through the entry of domestic cosmetic brands into overseas distribution channels and the launch of new products. Domestic indie brands are gaining the choice of overseas consumers through innovative products and marketing strategies. As the popularity of K-beauty rises, the performance of distribution platforms, cosmetic manufacturers, and container companies is also improving. This is why the stock price of Permtek Korea, which is responsible for producing unique cosmetic containers for indie brands, is on an upward trend.
According to the financial investment industry on the 14th, Permtek Korea's stock price has risen 81.6% since the beginning of this year. During the same period, the KOSDAQ index rose by 0.5%.
Founded in 2001, Permtek Korea specializes in manufacturing cosmetic containers such as pumps, containers, tubes, compacts, droppers, and sticks. Due to the nature of the cosmetic container industry, product cycles are short. Its main customers are domestic and international cosmetic companies, as well as Original Equipment Manufacturers (OEM) and Original Design Manufacturers (ODM). The company’s strength lies in the pre-mold method, which uses pre-designed and manufactured standard molds to provide the same containers to various clients. The pre-mold method significantly reduces development costs and time.
As domestic cosmetic brands gain popularity overseas, the number of emerging indie brands is also increasing. The number of clients adopting the pre-mold models produced by Permtek Korea has grown. With rising popularity of not only Korean-made color cosmetics but also basic skincare products in overseas markets, demand for tube containers for products like sun care and cleansing foam has increased. Sales are rapidly growing as the company also handles the production of containers for lip balm and indie brand hand creams. Permtek Korea is receiving positive evaluations overseas by developing eco-friendly containers such as recyclable and refillable ones. The company is strengthening its competitiveness based on extensive container production experience and a high degree of automation.
In the first quarter of this year, Permtek Korea achieved sales of 76.9 billion KRW and operating profit of 10.2 billion KRW, increasing by 18.6% and 36.9% respectively compared to the same period last year. It set a record for the highest quarterly sales ever. Operating profit exceeded market expectations of 9.5 billion KRW. Jodaehyung, a researcher at DS Investment & Securities, analyzed, "Sales and profitability of both the pump and tube divisions have improved. Profitability has increased due to production efficiency from volume growth." He added, "The number of domestic customers as well as overseas customers and partners is steadily increasing. Balanced growth is coming from all product portfolios."
The performance outlook for Permtek Korea is bright. Yuanta Securities estimates that Permtek Korea will achieve sales of 83 billion KRW and operating profit of 11.5 billion KRW in the second quarter of this year, representing increases of 9.4% and 11.1% respectively compared to the same period last year. Researcher Seungeun Lee of Yuanta Securities explained, "The second quarter is the peak season when sun care product production increases. In the second half of this year, growth rates will rise as overseas customer orders increase."
To respond to the increasing orders, Permtek Korea is continuing its expansion investments. In July last year, it secured part of the investment funds for its 4th factory by disposing of treasury stocks. Construction is scheduled to begin this month, with completion targeted for the fourth quarter of next year.
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