Hanwha Investment & Securities on the 29th assessed that Cosmecca Korea will continue stable growth over the long term through the inflow of new clients and an expansion in transaction scale. It maintained a "Buy" investment opinion and a target price of 100,000 won. The previous trading day's closing price for Cosmecca Korea was 69,500 won.
Hanwha Investment & Securities estimated that Cosmecca Korea will post, on a consolidation basis, third-quarter (July–September) revenue of 150 billion won and operating profit of 20 billion won. Those figures are up 18.5% and 31.5%, respectively, from a year earlier.
Han Yu-jung, an analyst at Hanwha Investment & Securities, said, "With large orders from existing clients and an increase in new clients, 16.8% revenue growth is expected in the Korea market," and noted, "The U.S. online channel performance of Korea company B, which has secured orders for more than half of its total stock keeping units (SKUs), has shown explosive growth momentum in the second half."
She added, "In the U.S. market, product shipments to U.S. company B, which accounts for more than 60% of Englewood Lab Korea (EWLK) sales, are expected to drive EWL consolidation earnings growth, showing more than 100% year-over-year growth as inventory clears and the supply of sub-materials normalizes."
Despite quarter-to-quarter earnings fluctuations, the growth trend remains stable, according to the analyst. From the perspective of manufacturer Cosmecca Korea, quarterly results tend to surge or temporarily slow whenever new clients come in, which is because client order patterns are not uniform from quarter to quarter.
The analyst said, "Due to order timing gaps, quarter-to-quarter earnings volatility may appear amplified, but over the long term, the steady inflow of new clients and the expansion of transaction scale are diversifying the client portfolio and strengthening the foundation for stable growth."