Kyobo Securities said on the 13th that Kolmar Korea(161890) set a record for the strongest earnings in the second quarter this year and that its footing in the global suncare market continues to expand. It raised its target price to 170,000 won from 130,000 won and kept its investment rating at "buy" (BUY). The previous session's closing price was 132,000 won.
Kolmar Korea's consolidated sales in the second quarter this year rose 18% on-year to 861.3 billion won, and operating profit increased 50% to 110.3 billion won. That beat the securities market consensus by 16%, and it was the first time quarterly operating profit topped 100 billion won.
Earnings growth was led by headquarters (Korea) and the container-making subsidiary Yonwoo. The Korea unit posted sales of 430.4 billion won and operating profit of 70.8 billion won, up 31% and 44%, respectively, from a year earlier. The operating margin (OPM) also hit the 16% range for the first time on record (16.4%). Strong sales of suncare products and operating leverage from large orders by major clients were key. Yonwoo also saw increased orders for pump containers for suncare products, with sales up 29% to 91.1 billion won and operating profit up 6.2 billion won to 7.0 billion won.
Kwon U-jeong, an analyst at Kyobo Securities, said, "Suncare exports that were previously centered on the United States are expanding to Europe, easing seasonality," and added, "Order flow in the third quarter is also increasing from the previous quarter, so sales strength is expected to hold even with fewer working days."
Kyobo Securities projected that as K-beauty expands globally, Kolmar Korea's market share (M/S) in suncare production will rise to the world's top tier. Kwon said Kolmar Korea's global suncare production M/S climbed from No. 3 worldwide last year to No. 2 this year and could challenge for the global No. 1 spot next year.
Kwon said, "This is a phase where the company's manufacturing competitiveness is standing out, with rising penetration of K-beauty suncare in Europe and top-tier share at Olive Young in the United States," and added, "Given it is moving toward the global No. 1 M/S, a premium valuation can be applied."