What Lies Ahead for CSA Cosmic After Successfully Turning a Profit?

[Asia Economy Reporter Yoo Hyun-seok] There is an analysis that CSA Cosmic, which succeeded in turning a profit last year, is expected to continue improving its performance this year as well.

According to the financial investment industry on the 20th, CSA Cosmic recorded an operating profit of 973.46 million KRW on a consolidated basis last year, turning a profit compared to the previous year. It also recorded an operating profit of 1.2 billion KRW on a separate basis.

The securities firm understood that this turnaround to profitability was due to the cost reduction effect from the unification of resources held by both companies through the merger with Chochos Factory despite COVID-19. Additionally, it was explained that the effect came from shifting offline-centered distribution channels to V-commerce and online.

The securities firm’s analysis is that the risk of continuous losses has disappeared with this turnaround. Kim Jae-yoon, a researcher at KTB Investment & Securities, said, "The risk of continuous losses has been resolved, and the financial structure was improved by absorbing Chochos Factory in April last year," adding, "As the possibility of escaping from the management item status due to continuous losses is expected, the focus should now be on the growth potential of the core business."

In particular, growth is expected to accelerate this year. He said, "Following the V-commerce strategy through CEO Jo Seong-a’s content power, after the performance turnaround in 2020, it is expected to enter a full-fledged growth trajectory in 2021," and evaluated, "Customer inflow to the company’s own mall through the V-commerce strategy will lead to improved profit margins."

KTB Investment & Securities forecasted that CSA Cosmic’s separate basis sales and operating profit this year will increase by 102% and 483% compared to the previous year, reaching 98 billion KRW and 7 billion KRW, respectively. He explained, "CSA Cosmic provides content honed through the home shopping channel, which can be seen as the predecessor of V-commerce, and possesses the DNA of V-commerce with know-how to communicate with consumers in real time," adding, "Based on this, the company plans to build its own V-commerce platform and expand its business area beyond cosmetics to inner beauty."

This content was produced with the assistance of AI translation services.