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Full view of Cosmax headquarters. (Photo=Cosmax) |
[Alpha Biz= Paul Lee] Daishin Securities raised its target price for Cosmax from KRW 180,000 to KRW 210,000, citing expectations of continued strong exports in 2024.
Cosmax reported a consolidated operating profit of KRW 39.8 billion in Q4, a 77% year-over-year increase, surpassing market expectations.
By region, domestic operations saw a 98% rise in operating profit and a 40% increase in revenue compared to the previous year, driven by steady orders from indie brands. Despite higher transaction fees due to increased exports and a KRW 500 million bad debt expense, improved cost efficiency and operational leverage contributed to profitability. Daishin Securities noted that Cosmax is diversifying its customer portfolio with tailored strategies to support 2025 orders.
In China, despite an unfavorable business environment, Q4 revenue grew 5% YoY to KRW 155 billion. Shanghai's revenue declined by 14% YoY due to weak performance from top clients but showed signs of recovery compared to the previous quarter, turning profitable. Guangzhou, on the other hand, saw a 43% YoY increase in revenue, driven by hit products from new clients and volume transfers from the It'S HAN JV. Given Cosmax’s high exposure to the Chinese market, Daishin Securities sees further upside potential as Chinese consumer demand recovers.
In the U.S., Q4 revenue fell 21% YoY due to declining orders from existing clients and delays in securing new ones. However, Daishin expects Cosmax’s ongoing efforts to acquire new clients to bear fruit, with sales picking up in the latter half of 2024 due to longer lead times in the U.S. market.
Meanwhile, Indonesia and Thailand continued their strong growth, with revenue surging 41% and 78% YoY, respectively, fueled by rising local cosmetic demand and strong exports to neighboring countries.
Daishin Securities forecasts sustained growth for Cosmax’s domestic business in 2024, driven by the increasing global penetration of K-beauty and robust export performance of indie brands.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
