[Click eStock] "Yeonwoo, Container Demand Up from Basics to Color Cosmetics"

NH Investment & Securities "Maintains Yeonwoo Target Price at 35,000 Won"
Eco-friendly Products Expected to Emerge as Growth Drivers

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] As the overall demand recovery cycle begins, it is expected that Yeonwoo's recovery will expand. Accordingly, NH Investment & Securities maintained a target price of 35,000 KRW and a 'Buy' rating for Yeonwoo.

On the 27th, according to NH Investment & Securities, not only major clients but also small and medium-sized clients are entering the overall demand recovery cycle, and domestic order trends are expected to expand. Exports are also showing an expanding recovery trend. Yeonwoo's China subsidiary is expected to turn its annual operating profit positive as local companies increase production. Mi-jin Jo, a researcher at NH Investment & Securities, said, "Although the prices of major raw materials are rising, the cost burden increase will be limited due to bulk purchases through agents," adding, "The recently launched container products continue to perform well in sales, so a rebound in operating profit margin similar to the golden age of cosmetics is expected."

Development of eco-friendly products is expected to act as a new growth engine. Recently, products made with eco-friendly technology, such as single-material eco-friendly pumps, paper-applied external containers, and eco-friendly refill products that dispense by elasticity without buttons, received awards and favorable reviews at the Packaging Expo. Researcher Jo explained, "Although eco-friendly products do not yet account for a large portion of total sales, they will establish themselves as a new growth engine along with overseas plastic regulations and changes in consumer awareness."

Accordingly, strong performance is expected to continue in the second half of the year. Researcher Jo predicted, "On a consolidated basis, sales and operating profit in the second half will increase by 16.4% and 55.5%, respectively, compared to the same period last year," adding, "While the high growth trend of orders from domestic key clients is maintained, the export sales growth rate will expand to double digits, increasing its contribution to performance."

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