Hanwha Investment & Securities evaluated Pumtech Korea on the 26th as the only leading packaging company in the market. It maintained a buy investment rating and raised the target price from the previous 74,000 won to 80,000 won. Pumtech Korea's closing price on the previous trading day was 66,500 won.
Han Yu-jeong, a researcher at Hanwha Investment & Securities, noted, "In the past, packaging was the most backward in the cosmetics supply chain, resulting in lower bargaining power. However, Korean products that differentiate their packaging are achieving good results in both domestic and international markets, and the perception that packaging is a point of differentiation is spreading among both Korean and global brands."
As the product and brand life cycles become shorter, it is increasingly difficult for brands to internalize packaging production lines as they did in the past. Consequently, the dependency of brands on packaging companies is expected to increase, according to one researcher.
One researcher said, "With a significant gap already having formed between the second and third-ranking companies, the change in the largest shareholder of the third-ranking company (Samhwa) is expected to alter the competitive landscape in the industry, which is likely to positively impact Pumtech Korea."
He added, "Even at this point, Pumtech Korea's orders are steadily increasing, and the contribution of high-value-added new products, which garner interest from brands, is also on the rise."