[Click eStock] "Silicon2, the K-Beauty Export Solution... A Beneficiary Stock of Thriving Brands"

On the 25th, Samsung Securities analyzed that Silicon Two has a structure that benefits regardless of the rise and fall of individual brands, as long as any brand performs well. No investment opinion or target price was provided.

Silicon Two is an 'intermediary distributor' that purchases products from domestic cosmetics brand companies and sells them to overseas distributors and end consumers. Most of its sales come from small and medium-sized overseas distributors.

Youngsoo Han, a researcher at Samsung Securities, stated, "Overseas distributors who want to sell domestic cosmetics can quickly and conveniently order various products from multiple brands at once on the website, and also enjoy the company's superior price negotiation power." He added, "Since the company operates branches and logistics centers directly in major sales regions, inventory receipt and order response are also swift."

Samsung Securities evaluated that Silicon Two has a structure that benefits regardless of which brand performs well. He said, "All of the company's sales occur when pre-purchased products are sold, so the business structure always carries inventory burden," and added, "Silicon Two sets the initial purchase quantity of each Stock Keeping Unit (SKU) at a low level and gradually increases the purchase quantity only when sales and marketing performance are good."

He continued, "Through the self-developed ERP system, the company thoroughly tracks expiration dates, and if sales trends are judged to be poor, it resolves inventory in advance through promotional events."

He emphasized, "Thanks to this, the company has never experienced an overstock problem while diversifying its brand portfolio and has discovered several rapidly growing indie brands. Because of this, the company has a structure that benefits regardless of the rise and fall of individual brands, as long as any brand performs well."