[Click eStock] Spring Comes to Color Cosmetics... "Clio, a Small and Mid-Cap Stock to Actively Buy"

[Asia Economy Reporter Ji Yeon-jin] Yuanta Securities announced on the 17th that it maintains a buy rating and a target price of 35,000 KRW for Clio, expecting global demand for color cosmetics to increase due to signs of easing COVID-19 restrictions worldwide.

Park Eun-jung, a researcher at Yuanta Securities, stated, "Currently, major countries and authorities around the world are gradually signaling the easing of COVID-19 restrictions, and it seems that people are becoming less sensitive to Omicron." She added, "We believe the time for the pent-up demand for color cosmetics to explode is approaching." She emphasized, "Clio's 78% of sales come from color cosmetics, ranking 5th in domestic color cosmetics market share and 3rd among domestic companies, showing the most pronounced profit elasticity due to market demand expansion. We consider it a small to mid-cap stock that should be actively bought."

Clio's consolidated sales in the fourth quarter of last year increased by 18% year-on-year to 59.4 billion KRW, and operating profit turned positive to 4.6 billion KRW. This exceeded market expectations by 36%. The main reasons were improved cost ratio due to increased sales and improved profitability from fixed cost efficiency. Operating profit margin rose to 7.7%. A net loss of 1.5 billion KRW (continued deficit) was recorded, reflecting impairment losses on financial products outside operating profit.

In particular, overseas sales increased by 17% year-on-year to 21.4 billion KRW, with sales in Japan, the United States, and China growing by 40%, 174%, and 10%, respectively. Domestic sales grew by 19% to 38 billion KRW, marking a return to growth after seven quarters since the spread of COVID-19.

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