Certainly! Below, I'll transform the provided document into a BULLINK portfolio-style report with relevant examples for better clarity and engagement.
BULLINK Portfolio Report: Earnings Surprises Await for Peak Season
1Q25 Review: Unexpected Winds of Change in Korea, China, and the US
In a stunning twist, Kolmar Korea has outperformed market forecasts with its impressive 1Q25 results, boasting a revenue of KRW 653.1 billion, marking a 14% year-over-year growth. Equally commendable is the company's operating profit, rising by 85% YoY to KRW 59.9 billion. This achievement highlights Kolmar Korea's robust growth and strategic operational leverage across primary business regions: Korea, China, and the United States.
Case in Point: Resurgence in Domestic Sales
Domestic sales alone surged to KRW 274.3 billion, a climb of 11% YoY, fueled by the burgeoning demand for sun care indie brands. As legacy product lines diminish—projected at a 10% market share versus 40% historically—these indie brands are capturing more market attention. With Q2 heralding the peak sun care season, elevated orders for leading brands signal potential for strengthened top-line growth. The strategic focus on an improved Sun Care and Hero SKU mix propelled a record Q1 operating margin to 12.4%.
Example: China's Unexpected Turnaround
Defying previous underperformance, China exhibited remarkable resilience with sales rallying to KRW 41.6 billion, a significant 20% YoY increase, with operating profit leaping by 72% YoY to KRW 3.1 billion, and an operating margin of 7.5%. Increased sun care orders following resolution of past pricing disputes underscore the region's positive trajectory.
The US: Hitting New Heights
In the US, Kolmar Korea continued its upward momentum, achieving a staggering 210% YoY sales growth at KRW 21.7 billion and a positive shift in operating profit to 1.5 billion won. The robust performance came from strong orders with key customers, accompanied by the successful acquisition of new base makeup clients. This solid profitability marks the second successful quarter with significant margins.
Looking Forward: Earnings and Valuation
Momentum in sun care and compelling US valuations drive current stock performance. With a vigorous order book aligning with peak season dynamics, we anticipate unprecedented domestic margins in Q2. Anticipation is high for the completion of the second US plant in June, paving the way for enhanced production capabilities and deeper market penetration. Considering these factors, we have revised our 25-year U.S. revenue projections from KRW 80 billion to KRW 90 billion.
In reflection of these optimistic adjustments and favorable industry multiples, we elevate our price target from KRW 92,000 to KRW 110,000. Currently trading at a modest 14x 12FM PER, Kolmar Korea's stock offers attractive prospects. Our recommendation remains a strong 'Buy'.
This format is tailored for an audience seeking insightful data and actionable insights, blending detailed financial results with strategic implications, and positioning Kolmar Korea's potential within a broader, contextually enriched narrative.
