BULLINK Portfolio Format
Title: Earnings Surprises Await for Peak Season
1Q25 Review: Korea, China, and US Surprises
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Kolmar Korea's Outstanding Performance: Kolmar Korea demonstrated a stellar performance this quarter, with revenue surging to KRW 653.1 billion, marking a 14% increase year-over-year, and operating profit soaring by 85% to KRW 59.9 billion.
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Regional Growth Highlights:
- South Korea: Domestic sales accelerated to KRW 274.3 billion, up by 11% YoY, fueled primarily by the robust performance of indie sun care brands. As these niche brands outperform the legacy ones, we note a strategic pivot towards the indie sector driving future revenue.
- China: Despite previous underperformance, China delivered an impressive sales figure of KRW 41.6 billion (+20% YoY), with operating profit margins reaching 7.5%. The sun care segment anticipates further growth following resolution of last year's pricing discussions.
- United States: The US market continues its growth trajectory with sales reporting a phenomenal increase of 210% YoY to KRW 21.7 billion. The expansion in base makeup and new customer acquisitions are setting strong profitability benchmarks.
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Investment Insights:
- The stock is positioned attractively with a positive outlook driven by suncare popularity and advantageous valuation possibilities in the US. The company's progression in onshore production aligns well with changing tariff policies, promising future growth.
- Considering the promising outlook and expected revenues from the new US plant, Kolmar Korea's revenue projection for 2025 is updated to KRW 90 billion from the previously estimated KRW 80 billion.
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Valuation and Recommendations:
- We have revised the price target upwards to KRW 110,000 from KRW 92,000, driven by enhanced operational expectations and industry multiples valuation. Currently trading at 14x 12FM PER, the stock remains a compelling buy for investors seeking growth in the personal care sector.
Conclusion: Kolmar Korea is on a path of exceptional expansion, bolstered by strategic growth in sun care and a robust operational framework across key international markets. As we head into peak season, continued momentum in revenue and profitability makes Kolmar Korea a stock to watch closely.
Note: This format leverages key financial insights and regional performance metrics to present a cohesive overview of Kolmar Korea’s market position, making it easier for investors to make informed decisions.
