[Click eStock] Silicon Two to Benefit from K-Beauty Boom... Target Price Raised

On July 25, Kiwoom Securities maintained its "Buy" investment rating for Silicon Two, a cosmetics distribution company, stating that it is expected to benefit as a partner in the growth of K-beauty. The target price was raised from 50,000 won to 62,000 won.

Jo Sojeong, a researcher at Kiwoom Securities, stated on this day, "Silicon Two's second-quarter sales are expected to reach 262.3 billion won, a 45% increase compared to the same period last year, and operating profit is forecast to reach 55.9 billion won, up 44% (operating margin 21%), which is in line with market expectations."

Going forward, demand for K-beauty brand companies and their overseas channel expansion is expected to increase together.

Looking at the expected regional performance for the second quarter, North American sales are projected to be 49.7 billion won, a 20% decrease year-on-year. While demand for K-beauty in the United States remains solid, logistics were delayed due to tariff effects.

European sales are expected to reach 97.6 billion won, a 120% increase. The volume supplied through Boots, a major beauty retailer in Europe, increased significantly, and demand for K-beauty from other B2B clients also grew, supporting robust growth.

Asian sales are projected to be 65.1 billion won, up 73%. Growth was particularly notable in Indonesia and Vietnam, driven by strong demand for K-beauty. Recently, brands such as Dalba, TirTir, Pyunkang Yul, and Beauty of Joseon have gained popularity. Middle East sales are expected to reach 20.8 billion won, a 44% increase year-on-year.

Researcher Jo commented, "In regions like Europe and the Middle East, where demand for K-beauty is emerging, it is not easy for brand companies to directly manage marketing or distribution. Therefore, the cooperative relationship between brand companies and Silicon Two is bound to become even stronger in the future."

Meanwhile, the possibility of additional share sales by Kim Seongwoon, CEO of Silicon Two and the largest shareholder, is cited as a factor that could affect investor sentiment. CEO Kim sold 545,862 shares (0.008% of total issued shares) in the first half of the year to pay taxes on shares received as a gift from a related party.

Researcher Jo added, "There is a possibility that CEO Kim may additionally sell 0.009% of the total issued shares to pay gift taxes. However, this will not affect management rights or the company’s fundamentals."