April 20, 2024

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[THE INVESTOR] Cosmecca Korea will regain momentum in the second quarter, said KTB Investment and Securities on May 21, raising the target price to 49,000 won (US$45.30) from 41,500 won.

Its first-quarter operating profit came in at 700 million won, widely missing market expectations, as its profitability was weighed down by consulting fees in the US and expanded manufacturing of low-margin sheet masks. 

From the second quarter, however, it will regain significantly from a spike in orders for summer cosmetics products, reshuffling sales channels and growth in China. The earnings of Englewood Lab which it has acquired will also be reflected, said analyst Kim Yeong-ok.

The cosmetics ODM maker’s revenue in the second quarter will leap 40.8 percent on-year to 70.2 billion won and operating profit by 24.8 percent to 6.5 billion won, estimated Kim maintaining a “buy” recommendation. 

By Hwang You-mee (glamazon@heraldcorp.com)