Hana Securities projected on the 19th that Kolmar BNH will gradually show a recovery in performance starting next year amid growing uncertainties in domestic and international consumer markets. It adjusted the target stock price down from 37,000 won to 17,000 won and presented an investment opinion of 'buy.'
In the third quarter of this year, Kolmar BNH reported consolidated sales of 147.4 billion won, a 5.8% increase compared to the previous year, and an operating profit of 4.1 billion won, a 40.1% decline year-on-year. The results were weak due to increased fixed costs related to the completion of the Sejong Plant 3 in the second half of last year and intensified competition amid a slowdown in the domestic consumer market, along with falling sales prices.
Sales in the health sector recorded 82.3 billion won, an increase of 7.9% compared to the previous year. By region, domestic sales increased by 15.9% compared to last year, while overseas sales decreased by 20.2%. Shim Eun-joo, a Research Institute analyst at Hana Securities, noted, 'In the domestic sector, the effect of the previous year's base effect and increased orders from large original design manufacturers (ODM) contributed positively, but overseas, there was a sharp decline in sales to Russia.'
In the fourth quarter of this year, consolidated sales and operating profit are estimated to increase by 6% and 27.6%, respectively, reaching 154.5 billion won and 5.1 billion won compared to the previous year. Analyst Shim said, 'The increase is expected due to the base effect from last year's material losses,' adding, 'In the domestic sector, the increase in orders from large clients and the positive effect of new cosmetic products will benefit performance.' However, in the overseas institutional sector, sluggish sales in Russia and China are expected to continue.
Hana Securities foresees that fixed costs related to the Sejong Plant 3 will increase again next year following this year, and uncertainties in domestic and international consumer markets will pose burdens. However, as the domestic cost base normalizes, the utilization rate of Sejong Plant 3 is expected to gradually rise due to expanded orders from large clients.
Analyst Shim noted, 'In the case of overseas markets, we expect a recovery in sales in Russia, and the target stock price has been lowered to 17,000 won due to adjustments to the estimates.'