Korean cosmetics stocks were strong early on the 29th on expectations for expanding overseas demand centered on the United States and Europe.
As of 9:59 a.m. that day on the Korea Composite Stock Price Index (KOSPI), Amorepacific was trading at 111,300 won, up 14,300 won (14.74%) from the previous session. Kolmar Korea was up 6,600 won (7.28%) at 97,300 won, and APR was also continuing gains in the 5% range.
It is seen as being driven by rising expectations for second-quarter earnings after K-beauty brands performed well during Amazon Prime Day in the United States recently.
Kwon Woo-jung, a Kyobo Securities researcher, said, "At last week's Amazon Prime Day events in major global markets, K-beauty brands generally advanced," noting, "Among the top 100 products in U.S. Amazon Beauty & Personal Care, K-beauty accounted for 29%, and skincare accounted for 38%."
Positive earnings outlooks in the securities industry are also supporting investor sentiment. Shinhan Investment & Securities raised its target price for Kolmar Korea to 130,000 won from 123,000 won that day and maintained a "buy" rating.
Park Hyun-jin, a Shinhan Investment & Securities researcher, said, "As production of basic cosmetics products centered on the Korea manufacturing subsidiary increases, changes through the product mix will make a significant contribution to profit improvement," adding, "The Korea subsidiary is expected to achieve a record-high profit margin."
Park also cited increased sales to new clients at the China subsidiary and the acquisition of new clients at the second U.S. plant as factors for improved earnings in the second half, and projected, "The U.S. subsidiary continues to see a decline in orders from existing clients, but the pace of decline appears to be slowing, and gradual earnings improvement is expected in the second half with the inflow of new clients."