[Click e-Stock] "CTK Expands into US OTC Market and Eco-Friendly Plastics... Corporate Value Reassessment Up"

On July 11, Kiwoom Securities reported that CTK is preparing for mid- to long-term growth by continuing to expand its cosmetics platform business, entering the North American OTC (over-the-counter) market, and developing an eco-friendly plastic raw materials business.

CTK is a cosmetics platform company that provides services for every stage, including product design, formula (ingredient prescription), marketing, production, and logistics. By not owning its own manufacturing facilities and instead utilizing external manufacturing sites, CTK increases production efficiency. The company differentiates itself from domestic ODM companies by focusing its business on the North American region and by having strong competitiveness in color cosmetics.

As of the first quarter of this year, sales by region were highest in North America at 76.5%, followed by Korea at 10.4%, and Europe and Asia at 13.1%. Recently, growth has been driven by achievements through online platforms and strengthened domestic brand sales. The online platform is considered suitable for indie brands as it can provide services tailored to various customer needs, such as small-batch production and quick turnaround. The number of users surpassed 40,000 last year, reflecting rapid growth. Going forward, CTK plans to expand its channels to B2C services by directly connecting consumers and brands and offering personalized product recommendations to consumers.

Oh Hyunjin, a researcher at Kiwoom Securities, stated, "The growth of the online platform is a good example of CTK's platform competitiveness," and added, "With future expansion into B2C channels, diversification of profitability is expected."

In March of this year, CTK laid the groundwork for expanding into the North American market by acquiring a US OTC (over-the-counter) manufacturing plant through its subsidiary. The company is expected not only to strengthen its competitiveness through sun care product development, but also to secure a competitive edge by providing OTC solutions to domestic companies whose demand in the US is increasing. In addition, local production facilities are expected to help address tariffs and reduce logistics costs. However, installation of automation equipment and other facilities is still underway, and full-scale operation is expected to begin in the fourth quarter of this year.

The eco-friendly business segment also shows promise for mid- to long-term growth. CTK has developed various eco-friendly materials and has succeeded in commercializing biodegradable plastic resin. The biodegradable plastic resins (PBAT, PHA) produced by CTK are completely decomposable and non-toxic, offering clear environmental advantages over widely used PLA.

These resins can replace a variety of disposable products and have received certification from the US FDA and Health Canada. CTK has also signed supply contracts for disposable products with global food distributors, retailers, and state governments in the US and Canada. The range of products that can be replaced is broad, from marine buoys to straws.

Researcher Oh commented, "Biodegradable plastic resin will emerge as a mid- to long-term growth driver in line with strengthened ESG management and eco-friendly policy trends in various countries," and added, "The company's proactive acquisition of technology is a positive factor."

This year, CTK is expected to post sales of 98.3 billion KRW (up 18% year-on-year) and operating profit of 2 billion KRW (up 1,397% year-on-year). The limited improvement in profitability is due to continued losses in the eco-friendly business segment and capital investment in North American OTC production facilities. However, with the North American OTC manufacturing plant expected to begin full-scale operation in the fourth quarter of this year and the biodegradable plastics business poised for significant growth in line with increasing demand for eco-friendly policies, substantial growth is anticipated.

Researcher Oh analyzed, "The contribution of new business segments to earnings will become significant from 2026 onward," and added, "Given the high growth potential, it is necessary to enhance corporate value along with the performance of new businesses."