[Click eStock] "Korea Kolmar, More Promising Second Half than First Half... Target Price Up"

Yuanta Securities raised the target price for Kolmar Korea from 82,000 KRW to 90,000 KRW on the 12th, viewing the second half of the year as more promising than the first half. The investment rating was maintained as 'Buy.'

Researcher Lee Seung-eun of Yuanta Securities stated, "The target price was calculated by applying a price-earnings ratio (PER) of 25 times to the cosmetics division and 15 times to HK Innoen based on the 12-month forward earnings per share (EPS). The cosmetics PER of 25 times corresponds to the average industry PER during 2014 when Korean cosmetics exports surged significantly."

Kolmar Korea recorded consolidated sales of 660.3 billion KRW in the second quarter of this year, a 10% increase compared to the same period last year, and operating profit rose 29% to 71.7 billion KRW. Lee analyzed, "Operating profit exceeded market expectations of 64.8 billion KRW by 11%. The domestic subsidiary drove overall growth. Kolmar Korea's standalone results achieved record highs with sales up 14% to 297 billion KRW and operating profit up 28% to 44.2 billion KRW."

The operating rate of the Korean subsidiary in the second quarter was 109%, slightly down from the first quarter. This is attributed to a 15% increase in production capacity (CAPA) at the end of the second quarter. Lee said, "Thanks to the utilization of subcontractors, total CAPA increased by 15%. In the second half, the logistics warehouse of Sejong Plant 1 will be relocated to Plant 2, and the fourth floor of Plant 1 will be used for new production facility construction. Production capacity at Sejong Plant 1 is expected to increase further."

The outlook is more optimistic for the second half than the first half. Lee said, "Kolmar Korea (standalone) is expected to maintain a positive momentum in the third quarter. In particular, July sales are understood to have reached a new high, surpassing the second quarter." He added, "Although August has about a week fewer working days due to holidays, last August experienced an earnings shock due to the replacement of the enterprise resource planning (ERP) system and reduced working days. Therefore, a base effect from last year is likely in the third quarter this year. Considering this, domestic sales growth is expected to be 24% this year." For the U.S., where major client orders have been rapidly increasing since June, sales growth is forecasted at 25% this year.

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