NH Investment & Securities analyzed on the 21st that COSMAX can secure profitability with the growth of domestic and Southeast Asian subsidiaries and the stabilization of impairment losses. It also raised the target price from the previous 200,000 won to 210,000 won and maintained the investment opinion of 'buy.' The closing price of COSMAX on the previous trading day was 168,200 won.

COSMAX R&I Center Innovation Library. /Courtesy of COSMAX

NH Investment & Securities predicted that in the fourth quarter of last year, COSMAX's consolidated revenue would increase by 18% year-on-year to 516.9 billion won, and operating profit would rise by 75% to 39.4 billion won. For the Korean subsidiary, revenue is estimated to grow by 32% year-on-year to 326.4 billion won, with operating profit increasing by 87% to 32.8 billion won.

Jung Ji-yoon, a researcher at NH Investment & Securities, said, "The revenue share of the top 10 brands stands at 50%, and quantitative and qualitative growth is being recorded based on increased export volumes, including numerous other brands." Jung emphasized, "The separate capacity (CAPA) will increase from 780 million to 1 billion, showing high growth each quarter this year."

In the case of the Chinese subsidiary, the recovery is slow. In the U.S., the Los Angeles office is operating normally, focusing on local brands, but meaningful revenue scale is expected to be secured only in the second half of this year. In the Southeast Asian market, stable margins are anticipated based on various product lines, including cushions and essences.

Jung noted, "Even assuming the recovery of the Chinese subsidiary is stagnant, the current valuation burden is not significant due to high growth in domestic and Southeast Asia," adding, "Recovery in China from the second quarter could serve as a positive factor for additional earnings upgrades."

He further stated, "As we produce local Chinese brands, the expansion of exports to neighboring countries with cost-effective C-beauty brands is also an expected factor in boosting domestic consumption."