[Special Stock] Cosmax Falls Over 7% Amid Concerns of Weak Consumer Spending in China

Cosmax is showing a decline of over 7% amid concerns about sluggish consumption in China.

As of 9:27 AM on the 19th, Cosmax is trading at 154,800 KRW, down 12,800 KRW (7.63%) from the previous day.

The decline in stock price is interpreted as being driven by concerns over earnings due to weak consumption in China. On the same day, Hana Securities downgraded Cosmax's target price from 220,000 KRW to 200,000 KRW, citing that the market environment in China could negatively affect Cosmax's operating conditions in the second half of the year. Eunjeong Park, a researcher at Hana Securities, explained, "The unfavorable market environment in China, which is a core subsidiary in terms of sales and profits, could pose a burden on Cosmax's consolidated earnings. While estimates for domestic, Southeast Asian, and U.S. markets have been revised upward, those for China have been downgraded, leading to a lower target price."

Recently released data showed that China's retail sales in June decreased by 15% compared to the same period last year. Hana Securities forecasts that Cosmax's Chinese subsidiary will report sales of 150 billion KRW and operating profit of 5.3 billion KRW in the second quarter, representing decreases of 5% and 68% respectively compared to the same period last year.