[Click eStock] "Cosmecca Korea Closing the Gap with Competitors through ODM Expertise"

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On February 2, Samsung Securities analyzed that Cosmecca Korea has entered a full-fledged phase of earnings growth, overcoming its limitations as a latecomer by focusing exclusively on cosmetics ODM (Original Design Manufacturing). Accordingly, the target price was raised to 114,000 won.

Lee Gayoung, a researcher at Samsung Securities, stated, "The company started as a latecomer compared to its competitors, and unlike its peers who are diversifying into health supplements and pharmaceuticals, it has concentrated solely on cosmetics ODM." She added, "The results of this strategy have finally begun to emerge from the second half of 2025."

In fact, there has been an increase in cases where brand companies that initially started transactions with Cosmecca Korea for only a few SKUs are now entrusting their entire product lineup to the company at once. There is also a growing trend of brands switching their orders to Cosmecca Korea during product renewal processes, even for items previously handled by other ODM companies.

Lee explained, "Brand companies that started with one or two SKUs are now placing orders for their entire product lineup at once, and even products previously manufactured by competing ODM firms have been switched to Cosmecca Korea during renewals." She attributed this to the company's competitive pricing and its ability to catch up with rivals in terms of formulation capabilities.

The earnings trend is also steep. Samsung Securities expects Cosmecca Korea's fourth-quarter sales and operating profit to reach 176.3 billion won and 25.5 billion won, respectively, exceeding market consensus by 8% and 16%. Among ODM companies, Cosmecca Korea is expected to achieve the highest growth rate this year.

This strong performance is expected to continue into the first quarter of this year. Lee noted, "The fourth quarter of last year was strong, and the first quarter of this year is even better." She pointed out that the main reason for the better-than-expected results is a key client of a separate subsidiary. This client places orders for about 90% of its products with Cosmecca Korea, and with its popularity surging recently-especially through platforms like TikTok in the United States-order volumes have been increasing each quarter.

Price competitiveness is also a key factor preventing client attrition. Lee said, "Clients who previously placed orders with other companies have switched to Cosmecca Korea during product renewals, drawn by its competitive pricing." Concerns about dependence on large clients are also limited. Currently, the top five clients account for less than 35% of Cosmecca Korea's total sales. She assessed, "Even so, the company maintains its top five client sales ratio below 35%, demonstrating effective risk management."

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