BULLINK Portfolio Report: Kolmar Korea's Earnings Surprises for 1Q25

Executive Summary

Kolmar Korea has reported a phenomenal first quarter (1Q25), surpassing market expectations with impressive revenue and operating profit growth across its key markets—Korea, China, and the U.S. This growth has been driven by strong performance in the sun care segment, especially among indie brands, and enhanced operational leverage. The stock’s momentum and compelling valuation suggest a bright outlook for the company.

1Q25 Earnings Review: Regional Performance

Korea: Strength in Sun Care

Revenue: KRW 274.3 billion (+11% YoY)
Operating Margin: 12.4%
Observation: The domestic market thrived on the back of indie sun care brands, which are eclipsing legacy brands in growth. Given the seasonal peak in Q2, an uptick in orders is anticipated, promising further top-line growth.

China: Rebound in Performance

Revenue: KRW 41.6 billion (+20% YoY)
Operating Profit: KRW 3.1 billion (+72% YoY, OPM 7.5%)
Observation: A notable rebound in sun care orders after a challenging previous year. Expect sustained order volume and profitability in the upcoming quarters.

U.S.: Surge in Sales and Profitability

Revenue: KRW 21.7 billion (YoY +210%)
Operating Profit: KRW 1.5 billion (YoY positive, QoQ +300 million won, OPM 6.9%)
Observation: Successful acquisition of new base makeup customers and continued demand reinforce the rising trajectory of sales and profits.

Strategic Outlook: Earnings and Valuation

Market Dynamics

Suncare Boom: With peak season orders robust, domestic margin records are expected in Q2.
U.S. Expansion: The imminent completion of the second plant in June and strategic talks with several brands highlight growth prospects.

Valuation & Recommendation

Target Price Increase: Raised to KRW 110,000 from KRW 92,000 to account for revised upwards U.S. revenue guidance (KRW 80 billion to KRW 90 billion) and improved domestic operating margins (25F OPM of 12.5%).
Recommendation: Maintains a ‘Buy’ rating as the stock trades at an affordable 14x 12FM PER.

Kolmar Korea stands poised for continued success with its strategic initiatives in sun care and diversified geographic growth, making it an attractive option for investors.