Certainly! Below is a revised version of the article in a BULLINK portfolio format:
BULLINK Portfolio Update: Earnings Surprises Await for Peak Season
1Q25 Review: Unanticipated Growth Across Korea, China, and the US
Kolmar Korea has delivered a stellar performance in the first quarter of 2025, surpassing market expectations by a significant margin. The company's total revenue jumped to KRW 653.1 billion, marking a 14% year-over-year increase. Meanwhile, operating profit surged by an impressive 85% year-over-year, reaching KRW 59.9 billion. This growth trajectory highlights the company's robust operational leverage across its key markets: Korea, China, and the United States.
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Domestic Market (Korea): The sun care segment led the charge, with sales reaching KRW 274.3 billion (+11% YoY). Indie brands have emerged as the primary growth drivers, outperforming legacy brands which are witnessing a decline. The transition from legacy to indie brands (now contributing 10% versus the previous 40%) is reshaping the company's portfolio. Remarkably, the improved product mix has propelled operating margins to a Q1 record of 12.4%.
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China: Defying previous sluggish trends, Chinese operations reported sales of KRW 41.6 billion (+20% YoY) with operating profits reaching KRW 3.1 billion (+72% YoY, OPM 7.5%). The turnaround was largely due to resolved unit price negotiations, paving the way for a resurgence in sun care orders.
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United States: The U.S. market maintained its stellar growth trajectory with sales soaring by 210% year-over-year to 21.7 billion won. Operating profit turned positive, with a notable sequential increase of 300 million won, achieving an OPM of 6.9%. The addition of new base makeup customers alongside robust existing orders underscores the market's momentum.
Strategic Prospects and Valuation Insight
Kolmar Korea's stock momentum is being driven by two main factors: the rebound in sun care demand and strategic valuation progress in the U.S.
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Domestic Outlook: The sun care sector is poised to achieve record margins in Q2, aided by strong order books and the seasonal demand peak.
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U.S. Expansion: With the completion of the second U.S. plant anticipated in June, Kolmar Korea is strategically positioned to capitalize on the revised tariff policies. New customer acquisitions for onshore production are already in discussion, enabling an upgraded U.S. revenue guidance from KRW 80 billion to KRW 90 billion for 2025.
Based on these factors, we are revising our price target from KRW 92,000 to KRW 110,000. The new target reflects an adjusted domestic OPM forecast of 12.5% and enhanced industry valuation multiples. Currently, the stock trades at a 14x 12-month forward P/E ratio, presenting an attractive buy opportunity.
This structured format not only highlights critical financial metrics but also provides strategic insights that are pivotal for potential investors monitoring Kolmar Korea’s growth trajectory across key markets.
