Cosmecca Korea, a KOSDAQ-listed company, saw its stock price weaken in early trading on the 24th following news of poor performance in the fourth quarter of last year.
As of 9:41 a.m. on the same day, Cosmecca Korea was trading at 43,850 won, down by 3,450 won (7.29%) from the previous trading day.
The cosmetics manufacturer and original design manufacturing (ODM) company Cosmecca Korea announced after the market closed on the 21st of this month that its fourth-quarter revenue rose 4.5% year-on-year to 128.3 billion won, while its operating profit fell 11.3% to 13.3 billion won. Operating profit fell 30% short of the market forecast of 19 billion won.
In response, securities firms have consecutively lowered their target prices for Cosmecca Korea. On that day, Kyobo Securities reduced its target price from 120,000 won to 80,000 won, a 33% decrease, while Hana Securities lowered it from 93,000 won to 77,000 won, and Yuanta Securities cut it from 80,000 won to 65,000 won.
In the short term, declining sales from its U.S. subsidiary, Englewood Lab, and labor cost burdens are expected to lead to negative growth in the first quarter of this year. Park Eun-jung, an analyst at Hana Securities, noted that "Cosmecca Korea's performance is passing its trough," and added that gradual improvements are expected due to expansion focused on domestic subsidiaries and an increase in over-the-counter (OTC) products from the U.S. subsidiary.