Certainly! Here's the article transformed into a BULLINK portfolio format:
BULLINK PORTFOLIO UPDATE
Earnings Surprises Await for Peak Season
1Q25 Review: Triumphant Growth Across Korea, China, and US Markets
Kolmar Korea has set the market abuzz with its 1Q25 earnings report, showcasing a noteworthy performance that exceeded expectations. The financial results were impressive, with revenue tallying KRW 653.1 billion, marking a 14% year-over-year increase, while operating profit scaled new heights at KRW 59.9 billion, reflecting a remarkable 85% growth YoY.
Domestic Momentum: Sun Care Brands Shine Bright
The domestic sales narrative reflects a robust surge, reaching KRW 274.3 billion, up 11% YoY. This surge is primarily driven by the soaring demand for sun care indie brands, which have outperformed legacy brands, marking a significant shift in consumer preferences. With the peak sun care season underway, this trend is poised to strengthen, further fueling top-line growth as the legacy brands' market share dwindles from an estimated 40% to a mere 10%. Notably, the redefined product mix in Sun Care and Hero SKUs propelled the operating margin to an unprecedented 12.4% in Q1.
China's Rebound: A Promising Turnaround
Despite previous challenges, China's performance was unexpectedly strong, recording sales of KRW 41.6 billion, a 20% YoY increase, and operating profit at KRW 3.1 billion, reflecting a 72% YoY surge with an OPM of 7.5%. The revitalized sun care orders, sans unit price negotiation hurdles, signal sustained growth potential.
US Expansion: Capitalizing on Market Dynamics
The US market maintained its upward trajectory, evidenced by sales hitting 21.7 billion won, a staggering 210% YoY increase, while operating profit turned positive with a 6.9% OPM. The strategic introduction of new base makeup products and acquisition of key customers bolster this growth narrative, ensuring sustained profitability for the second successive quarter.
Strategic Implications and Valuation Appeal
Kolmar's stock is gaining momentum from robust sun care demand and appealing valuations in the US. With peak season propelling sun care orders and the anticipated completion of a second plant in June, the stage is set for record-breaking domestic margins in Q2. Ongoing negotiations with brands for onshore production following tariff adjustments highlight further growth potential. Hence, the 2025 US revenue guidance is revised upward from KRW 80 billion to KRW 90 billion.
Reflecting these positive dynamics, we are revising our price target to KRW 110,000 from KRW 92,000, acknowledging higher earnings estimates (25F domestic OPM of 12.5%) and enhanced valuation through industry multiples. Trading at 14x 12FM PER, the stock remains an attractive buy.
This BULLINK format succinctly encapsulates Kolmar Korea's financial prowess and strategic growth outlook, reinforcing its robust market positioning and investment viability.
