[Click e-Stock] "Cosmecca Korea Maintains Earnings Momentum... Target Price Raised"

Target Price Raised from 90,000 Won to 100,000 Won

On November 7, Daishin Securities raised its target price for Cosmecca Korea from 90,000 won to 100,000 won, citing expectations of continued top-line growth. The investment opinion was maintained at 'Buy'.

Jung Hansol, a researcher at Daishin Securities, stated, "We have raised our earnings estimates and increased the target price by 11% as we expect continued top-line growth. The earnings momentum remains solid due to last year's low base and ongoing order expansion. In particular, products manufactured by Cosmecca Korea have established themselves as hit products by maintaining high rankings overseas, which increases the likelihood of continued large-volume orders from major clients of the Korean subsidiary."

In the third quarter of this year, Cosmecca Korea recorded 82.4 billion won in sales, up 44% year-on-year, and 27.2 billion won in operating profit, up 79%. Researcher Jung analyzed, "The company delivered outstanding results, significantly exceeding consensus (the average of securities firms' forecasts). The Korean subsidiary achieved 129.8 billion won in sales, up 57%, and 14.5 billion won in operating profit, up 21%. This was driven by a steady increase in global K-beauty demand, which led to both new customer acquisitions and reorders from existing customers, resulting in record-high quarterly sales."

The U.S. subsidiary posted 61.8 billion won in sales, up 50%, and 13.2 billion won in operating profit, up 225%. Jung commented, "The U.S. subsidiary is expected to see further order expansion as local production preferences grow and there are more cases of switching from national ODMs to turnkey factories. In addition, the effects of automation facility investments and the expansion of indie and OTC (Over-the-Counter) clients are expected to further improve the profitability of the U.S. subsidiary."

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