Record Quarterly Sales of 588.6 Billion KRW
Operating Profit of 51.3 Billion KRW, Up 13% Year-on-Year
Strong Growth Led by Indie Brands Amid K-Beauty Boom
Southeast Asian Subsidiaries Grow Rapidly... Thailand Sales Surge 152%
Cosmax, an original design manufacturer (ODM) of cosmetics, recorded its highest-ever quarterly sales in the first quarter. This achievement was driven by the continued global popularity of K-beauty, which led to an increase in export volumes from its Korean subsidiary.
According to the Financial Supervisory Service's electronic disclosure system on May 13, Cosmax's first-quarter sales reached 588.6 billion KRW, up 11.7% from the same period last year. This figure surpassed the previous record for quarterly sales, which was 558 billion KRW in the fourth quarter of last year. Operating profit rose to 51.3 billion KRW, an increase of 13% year-on-year.
The strong growth of the Korean subsidiary drove the record sales. Sales at the Korean subsidiary reached 362.8 billion KRW, up 15% from the previous year. Operating profit increased by 14% to 34.3 billion KRW. This was the result of explosive growth among major clients, particularly indie brands, continuing from last year.
With the increase in sales from the Korean subsidiary, the regional sales composition also expanded. In the first quarter, Korea accounted for 62% of total sales, up 2 percentage points from the same period last year, followed by China (28%), the United States (5%), Indonesia (5%), and Thailand (4%).
A Cosmax representative stated, "Basic skincare products containing high-functional ingredients such as PDRN, an organizational revitalization substance, and tranexamic acid, including gel masks and essences, saw strong sales," adding, "In the color cosmetics and sun care sectors, the successive launch of innovative products, including hybrid formulations, also significantly contributed to our performance."
Among overseas subsidiaries, Southeast Asian subsidiaries experienced rapid sales growth. The Indonesian subsidiary recorded sales of 29.6 billion KRW, up 22.8% year-on-year. Net profit rose 18.2% to 2.7 billion KRW. Increased sales of sun care and cleansing products had a positive impact on revenue. Rapid production of second-quarter orders, prompted by urgent requests from clients, also contributed to the results. The Thai subsidiary posted sales of 23.9 billion KRW, up 152% from the previous year, and returned to profitability with a net profit of 2.1 billion KRW. The increase in sun cream orders drove this performance.
The Chinese subsidiary posted sales of 162.7 billion KRW, up 3.4% year-on-year. Cosmax operates both Shanghai and Guangzhou subsidiaries in China. The Shanghai subsidiary, benefiting from the growth of major clients, recorded sales of 109 billion KRW and net profit of 7.2 billion KRW, representing increases of 1% and 39% year-on-year, respectively. The transfer of production from Korea to local facilities also boosted results.
The Guangzhou subsidiary achieved sales growth of 4% to 48.5 billion KRW, but net profit fell 41% to 3.9 billion KRW. This was due to a growing preference for cost-effective products, which led to a reduction in production volume. Cosmax plans to respond to market changes with its "Loco" project, which aims to secure a pool of raw materials and sub-materials to lower prices.
The US subsidiary recorded sales of 28.7 billion KRW, a 26% year-on-year decline. Net loss amounted to 11.7 billion KRW. This was due to a decrease in orders from existing clients and delays in revenue contributions from new clients. The drop in sales also led to worsened profitability. A Cosmax representative added, "If sales from new clients begin to be reflected in the second half of the year, we expect to see a performance trend of a weak first half and a stronger second half."
Meanwhile, Cosmax plans to maintain its upward performance trend by expanding its global annual production capacity (CAPA). The domestic plant aims to secure a CAPA of over 1 billion units, a 30% increase from the previous year, through the expansion of production lines. Overseas plants will also undergo partial expansion, with the company planning to increase its total global CAPA from 3.1 billion units last year to 3.3 billion units this year.
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