Korea Kolmar Joins the Ranks of Conglomerates, Corporate Value Soars... Surpasses Cosmax After 560 Days

Korea Kolmar Surpasses Competitor Cosmax in Market Capitalization

'Revaluation for Growth and Stability'

Corporate Value Soars Following Designation as Large Conglomerate

Changing Dynamics in the Status of the ODM Industry Accelerate

The corporate value of Korea Kolmar, a cosmetics Original Development Manufacturing (ODM) company, is soaring. Following its designation as a public disclosure conglomerate (large enterprise group) by the Korea Fair Trade Commission, its growth potential, based on record-breaking first-quarter results this year, has captured investor sentiment and enabled it to catch up with the market capitalization of Cosmax, its ODM competitor.

According to the Korea Exchange on May 20, Korea Kolmar closed at 91,800 won the previous day, reaching a market capitalization of 2.1669 trillion won. On the same day, Cosmax closed at 177,000 won, ending with a market capitalization of 2.0089 trillion won.

Korea Kolmar and Cosmax have long competed for the top spot in cosmetics ODM market capitalization. Since Korea Kolmar was listed on the KOSPI in 2012, it held the No. 1 position in cosmetics ODM market capitalization. However, Cosmax, a later entrant, surpassed Korea Kolmar for the first time on October 30, 2024. Korea Kolmar reclaimed the top spot in over two years, recording a market capitalization of 2.3015 trillion won as of the closing price on May 13.

Cosmax has enjoyed a premium in the domestic stock market, driven by its aggressive overseas expansion strategies in China and the United States and expectations of expanding its global customer base. With Korean cosmetics exports surging, Cosmax has been recognized for securing global production base competitiveness, earning it a reputation as one of the biggest beneficiaries of K-Beauty. In fact, since the second half of last year, Cosmax's stock price has climbed sharply, maintaining the No. 1 spot in market capitalization among cosmetics ODM firms.

The key differentiator in corporate value between the two companies lies in their first-quarter performance this year. Cosmax posted consolidated sales of 682 billion won in the first quarter, up 15.9% year-on-year and marking its highest-ever quarterly sales. However, operating profit was 53 billion won, up only 3.3% year-on-year, slightly falling short of the market consensus of 55.2 billion won.

By contrast, Korea Kolmar recorded sales of 782 billion won in the same period, up 11.5% year-on-year, with operating profit soaring 31.6% to 78.9 billion won.

Additionally, Korea Kolmar's designation as a conglomerate by the Korea Fair Trade Commission in April, joining the ranks of companies with assets exceeding 5 trillion won, is also seen as a catalyst for its corporate value reassessment. Previously, cosmetics ODM firms were mainly evaluated for their growth potential and export momentum. Now, being classified as part of a conglomerate group increases disclosure requirements and transaction transparency among affiliates, which could enhance the company's credibility and value in the long term.

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There is also analysis that Korea Kolmar is being recognized for both stable performance and growth potential. Previously, Cosmax was strongly associated with "growth" and Korea Kolmar with "stability." Recently, however, Korea Kolmar has been reflecting a growth premium, as it benefits from expanding domestic and overseas orders, solid profitability at its domestic subsidiary, and heightened expectations for increased K-Beauty ODM demand.

Accordingly, securities firms are raising their outlook on Korea Kolmar. KB Securities raised its target price for Korea Kolmar by 13% to 130,000 won, while NH Investment & Securities also raised its target by 30% to 130,000 won. Other major securities firms are also following suit and revising their target prices upward for Korea Kolmar.

NH Investment & Securities analyst Jung Ji-yoon said, "It is very encouraging that large cosmetics manufacturers' operating margins are approaching 15%," adding, "With Korea Kolmar's K-Beauty brands expanding their skincare and sun care export volumes, a strong performance is certain during the second quarter peak season."

Kwon Woo-jung, an analyst at Kyobo Securities, commented, "Korea Kolmar's strengths in basic and sun care products remain key categories in K-Beauty exports. Moreover, export growth is accelerating not only to the United States but also to Europe and other non-U.S. markets, further strengthening the flow of K-Beauty demand. In particular, Kolmar's No. 1 client’s sun care products are ranking high among European retailers, which demonstrates the company's unrivaled technological capabilities and high competitiveness in the global market."

The sharp rise in Korea Kolmar's corporate value is also seen as a symbolic moment that reflects the changing status of ODM companies. Whereas the K-Beauty market was once dominated by traditional major brands, leadership is now shifting to companies with fast planning, production, and global response capabilities. For example, LG Household & Health Care, once called the "emperor stock" of the cosmetics sector with a share price exceeding 1.7 million won and a peak market capitalization of over 20 trillion won, has slumped to 3.9757 trillion won as of the May 19 closing price. Meanwhile, Amorepacific, which has sought change, and the newly emerged APR, continue to enjoy high valuations in the market.

An industry insider said, "In the past, large brands led the market; now, as global indie brand demand grows, the key is how quickly companies can plan, produce, and respond to market changes. The rising corporate value of ODM companies is closely linked to this shift in industry structure."

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