[Market Focus] Cosmax Shares Plunge 17% as Brokerages Slash Target Prices

On November 11, Cosmax shares saw a significant decline. Securities firms have consecutively lowered their target prices after Cosmax reported weak third-quarter results.

As of 2:05 p.m. on the same day, Cosmax was trading at 156,100 won, down 33,400 won (17.63%) from the previous trading day.

The previous day, Cosmax announced in a regulatory filing that its consolidated operating profit for the third quarter of this year was provisionally tallied at 42.7 billion won, a 1.6% decrease compared to the same period last year.

In response, securities firms collectively lowered their target prices. Han Yoojeong, a researcher at Hanwha Investment & Securities, expressed concern about the deteriorating profitability of the Korean subsidiary, which had been responsible for improving consolidated performance. She pointed out that it would be necessary to respond after confirming improvements in the customer and product mix. She lowered the target price from 270,000 won to 220,000 won.

Jung Hansol, a researcher at Daishin Securities, also noted, "While the domestic subsidiary continues solid topline growth, profitability is currently in a short-term adjustment phase." He added that "the turnaround speed of the Chinese and U.S. subsidiaries will be the key variable for a share price recovery." He set the target price at 220,000 won, a 21% decrease from the previous 280,000 won.

Bae Songyi, a researcher at Mirae Asset Securities, stated, "In the second half of the year, the burden is increasing due to a slowdown in topline growth and the inflow of low-efficiency clients." She added, "It is expected to take more time to confirm margin improvement. Reflecting the downward revision of earnings estimates, the target price is adjusted from 290,000 won to 230,000 won."

Lee Gayoung, a researcher at Samsung Securities, said, "In addition to the deterioration in operating results, a one-off corporate tax payment of 10.6 billion won (for underreported amounts from 2019 to 2024) due to a regular tax audit was also reflected, causing net profit to fall a staggering 70% below our estimate." She lowered the target price from 272,000 won to 235,000 won.