Certainly! Below is a BULLINK portfolio format article based on your provided structure, with considerations for capturing attention and providing insightful data for investors, especially with a focus on stocks and investment contexts.
Earnings Surprises Await for Peak Season
1Q25 Review: Surprising Upside in Korea, China, and US Markets
Kolmar Korea delivered standout performance in 1Q25, exceeding market forecasts with revenue reaching KRW 653.1 billion, marking a 14% increase YoY, and operating profit surging by 85% YoY to KRW 59.9 billion. This robust performance highlights the firm’s effective strategies and growth dynamism across key markets: Korea, China, and the United States.
Domestic Market Growth: In Korea, sales soared to KRW 274.3 billion, up 11% YoY. This growth trajectory is fueled by the booming demand in sun care indie brands, which have outmaneuvered legacy brand performance significantly. With Q2 heralding the peak sun care season, Kolmar Korea is poised for continued revenue expansion, supported by a strategic shift from legacy brand dominance (now 10% from 40%) to a Hero SKU mix, delivering an operational margin peak of 12.4% — a record for Q1.
Unexpected Gains in China: Reversing past underperformance, China recorded strong sales of KRW 41.6 billion (+20% YoY) and operating profits of KRW 3.1 billion (+72% YoY, OPM 7.5%). The resurgence is attributed to resolving last year’s unit price negotiations, paving the way for a likely extension in sun care orders, setting a growth precedence.
US Market Momentum: The US continues to impress with a phenomenal sales hike to KRW 21.7 billion, marking a 210% YoY growth, and a YoY positive operating profit of KRW 1.5 billion (QoQ +KRW 300 million, OPM 6.9%). The expansion is driven by solid customer order books and securing new base makeup clients, with a commitment to profitability solidified for two consecutive quarters.
Earnings and Valuation Outlook
With sun care in peak season and favorable US valuations, Kolmar Korea’s stock exhibits strong upside potential. Anticipated domestic record margins in Q2 align with strategic expansions, as the completion of a second US plant in June boosts capacity for onshore brands post-tariff adjustments. This optimism adjusts US revenue guidance upwards to KRW 90 billion from KRW 80 billion for FY25.
Reflecting these adjustments, our price target elevates to KRW 110,000 from KRW 92,000, integrating higher operational margin estimates and enhanced valuation metrics in line with industry benchmarks. Trading at 14x 12-month forward PER, the stock remains an attractive buy for opportunistic investors seeking exposure to growth momentum and strategic market positioning.
This format consolidates insights pertinent to investors, emphasizing market performance, growth projections, and strategic assessments that reinforce purchase recommendations while encapsulating geographical nuances in Kolmar Korea's business model.
