[Special Stock] Expected Benefit from China's Economic Stimulus... Cosmax Up Over 11%

The stock price of Cosmax, a domestic cosmetics company, is rising sharply following the Chinese government's announcement of a large-scale economic stimulus package. As of 9:13 AM on the 25th, Cosmax was trading at 137,400 KRW, up 14,500 KRW (11.80%) compared to the previous trading day.

The day before, the People's Bank of China (PBoC) decided to cut both the policy interest rate and the reserve requirement ratio. By lowering the reserve ratio by 50 basis points (1bp = 0.01 percentage points), it plans to supply liquidity worth 1 trillion yuan (approximately 190 trillion KRW) and indicated the possibility of an additional 25 to 50 basis points cut within the year. It also announced stimulus measures for the real estate and stock markets. New monetary policy tools to support the capital market, liquidity support secured by financial institutions' assets (about 95 trillion KRW), and re-lending support for share buybacks (about 57 trillion KRW) were also announced.

On the same day, Daol Investment & Securities issued a buy recommendation and set a target price of 175,000 KRW for Cosmax. Jonghyun Park, a researcher at Daol Investment & Securities, said, "The main original design manufacturer (ODM) facilities are located in Korea, China, the United States, Indonesia, and Thailand. While solid growth has been recorded domestically as well as in Indonesia and Thailand, sales in China have declined due to the economic downturn," adding, "Although the high proportion of sales in China and issues such as accounts receivable have led to undervaluation, these related problems are gradually being resolved, and an improvement in profit margins is expected."