New Listing of SOL Cosmetics TOP3 Plus ETF

Shinhan Asset Management announced on the 21st that it will list the ‘SOL Cosmetics TOP3 Plus ETF,’ which invests in key companies across the domestic cosmetics value chain, on the Korea Exchange.

Kim Jeong-hyun, Head of the ETF Business Division at Shinhan Asset Management, explained, "The domestic cosmetics industry, which had a high export ratio to China in the past, has long experienced stock price discounts, but with changes in the business structure, export regions are expanding globally, centered on the United States."

He added, "The rapid growth of K-Beauty is the result of synergy created by key players such as Cosmax, the world’s No. 1 global Original Design Manufacturer (ODM), and Silicon2, which supports overall distribution and marketing," and emphasized, "An investment strategy focused on the value chain centered on ODM, distribution, and brands is effective in the cosmetics market."

Cosmetics indie brands are expanding worldwide based on high scalability and customer loyalty. As the influence of production and distribution partners grows, companies within the value chain, rather than specific brands, are generally recording significant performance improvements, with ODM companies showing a three-year consecutive increase in operating profit margins.

The SOL Cosmetics TOP3 Plus ETF consists of a total of 10 stocks. Within the domestic cosmetics value chain, it invests about 60% in the ‘top 3’ companies: Silicon2, Cosmax, and Amorepacific, which are No. 1 in distribution, ODM, and branding, respectively. It also selects ODM companies such as Cosmekakorea and Kolmar Korea, as well as brand companies with notable global sales like VT and APR.

Kim said, "The SOL Cosmetics TOP3 Plus ETF is an ETF that can respond to a new K-Beauty cycle, which can be considered a completely different business from the past," and introduced it as "a product that can satisfy investment needs related to structural changes in the cosmetics industry."

He continued, "It is experiencing exceptional high growth after moving away from the China momentum, which had been a long-term undervaluation factor for stock prices," and added, "The domestic cosmetics industry is currently in an undervalued valuation range, making it highly attractive for investment."

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