BULLINK Portfolio: Earnings Surprises in Peak Season
Strategic Insights: 1Q25 Review of Key Markets
Kolmar Korea has delivered impressive results in the first quarter of 2025, showcasing notable earnings surprises across Korea, China, and the US. These figures not only surpassed market expectations but also set a robust precedent for peak season performance.
Impressive Domestic Performance
- Revenue: KRW 653.1 billion (+14% YoY)
- Operating Profit: KRW 59.9 billion (+85% YoY)
- Major drivers include the surge in sun care indie brands, achieving substantial growth as legacy brands dwindle, contributing to peak season order inflows. This strategic pivot has elevated operating margins to a record high of 12.4% for the first quarter.
Resurgence in China
- Sales Performance: KRW 41.6 billion (+20% YoY)
- Operating Profit: KRW 3.1 billion (+72% YoY, OPM 7.5%)
- Despite prior setbacks, sun care orders have rebounded, driven by improved unit price negotiations, signaling continuing strength in upcoming quarters.
Robust Growth in the United States
- Sales Figures: KRW 21.7 billion (+210% YoY)
- Operating Profit: KRW 1.5 billion (YoY positive, QoQ +300 million, OPM 6.9%)
- The US market portrays a consistent upward trajectory with the integration of new product lines and a broadened customer base, sustaining profitability and margin growth.
Market Valuation and Strategic Forecast
- Stock Momentum: Driven by Sun Care demand and US market valuation.
- Valuation Target Raised: From KRW 92,000 to KRW 110,000, reflecting enhanced domestic OPM of 12.5% and improved industry multiples.
- Forward-looking Growth: With completion of the second plant expected in June, and ongoing negotiations with brands for onshore production, US revenue guidance for 2025 is revised upwards from KRW 80 billion to KRW 90 billion.
Investment Recommendation: At a current trading multiple of 14x 12FM PER, the stock remains an attractive Buy.
Investment Thesis: Kolmar Korea's strategic redirection towards high-growth segments like sun care, coupled with structural improvements in China and the US, underscore strong performance potential in the ensuing quarters.
By intricately weaving industry trends with data-driven insights, this portfolio analysis presents a compelling case for stakeholders to leverage Kolmar Korea's earnings momentum amid dynamic market conditions.
