[Click eStock] "Cosmax Continues Growth as World's No.1 ODM... New Target Price Set at 195,000"

Leading Cosmetics ODM Company in the Global Market
Poor Performance of US and China Subsidiaries, Future Improvement Tasks
Enhancing Performance Visibility through Southeast Asia Growth and Diverse New Product Launches

Meritz Securities on the 26th newly issued a target price of 195,000 KRW and a 'Buy' investment opinion for Cosmax, stating that it will maintain its status as the world's No. 1 cosmetics original design manufacturer (ODM). Cosmax's closing price on the previous trading day was 134,000 KRW.

According to Meritz Securities, when the one-brand shop market emerged in 2003, Cosmax grew as the largest ODM company for Missha and led the market. Subsequently, through a localization strategy in its entry into the Chinese market, it recorded sales of 600 billion KRW in China, advancing to become the world's largest ODM company.

Currently, Cosmax holds the world’s highest number of indie brand clients, research and development teams, cosmetic recipes, and new product launches, thereby strengthening its market dominance. In the third quarter, Cosmax recorded consolidated sales of 530 billion KRW and operating profit of 43 billion KRW, increasing by 16% and 30% respectively compared to the same period last year. Sales of the domestic corporation increased by 21% and operating profit by 53% year-on-year, driving performance improvement. However, the underperformance of the US and Chinese subsidiaries is somewhat disappointing and is identified as an area requiring improvement going forward.

It is projected that by 2025, sales will reach 2.4 trillion KRW and operating profit 255 billion KRW. Park Jong-dae, a researcher at Meritz Securities, said, "Cosmax is pursuing continuous growth through diversification of its customer portfolio and expansion into global markets." He added, "In particular, the steep growth in the Southeast Asian market and the launch of new products from various brands are enhancing earnings visibility." Furthermore, he noted, "As the world's No. 1 cosmetics ODM company, Cosmax is expected to strengthen its position as an industry-leading company based on its technological capabilities and research and development competencies."