Domestic Subsidiaries Boost Overall Performance '↑'
Sun Product Sales Expected in Q3
Korea Kolmar's stock price has surged sharply, reaching its highest point of the year. This is interpreted as being influenced by the booming cosmetics market leading to improved performance.
According to the financial investment industry on the 17th, Korea Kolmar closed at 72,800 KRW on the 13th of this month. This marks a 35.82% increase compared to the end of last year. On the 10th of this month, it even reached an all-time high of 76,200 KRW.
The rise in Korea Kolmar's stock price is attributed to improved earnings. In the second quarter on a consolidated basis, Korea Kolmar recorded sales of 660.3 billion KRW and an operating profit of 71.7 billion KRW. This represents increases of 10.1% and 28.9% respectively compared to the same period last year. This was due to continued performance improvement of the domestic corporation and high growth of the US corporation, which reduced losses.
In particular, securities firms expect Korea Kolmar to achieve strong results in the third quarter as well. Shinhan Investment Corp. forecasted that Korea Kolmar's consolidated sales and operating profit for the third quarter would be 644.5 billion KRW and 65.7 billion KRW, respectively, marking increases of 25% and 112% compared to the same period last year.
Hyunjin Park, a researcher at Shinhan Investment Corp., emphasized, "The main reason for the strong performance is thanks to the excellent results of the Korean corporation, where export demand for sun products (UV protection) within the Korean production corporation is expanding not only in the US but globally," adding, "It is judged that the operating leverage effect is accelerating due to the increase in US exports of cleansing products across Korean OEM companies."
He also predicted that the operating rate in the US would improve. He explained, "In the US, the operating rate is showing an improving trend due to the production of renewed products for clients," adding, "It is understood that the breakeven point is reached on a monthly basis, and the Chinese corporation is contributing to sales while managing profits without incurring losses." He further added, "Yeonwoo is expected to show a trend of profit improvement in the second half due to production facility improvements."
Jiyoon Jung, a researcher at NH Investment & Securities, also emphasized, "Regarding domestic sales, the proportion of sun products in July and August is similar to that of the second quarter," adding, "Despite a decrease in production days compared to the previous quarter due to export growth, favorable sales growth is expected, and double-digit profit margins are anticipated even considering incentives." She continued, "Besides the core business, profitability improvements of HK Innoen and Yeonwoo are also expected to contribute, indicating a momentum for overall corporate performance."
Along with this, future growth is also expected to continue. Researcher Jung said, "By the end of this year, the separate corporation's CAPA (production capacity) has been secured at about 570 million units per year," adding, "Considering the operation of the second US plant in the first half of next year, growth potential is relatively clear, highlighting its relative attractiveness within the industry."
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