Cosmax stock gains earnings support from strong order growth

Cosmax stock is facing higher earnings expectations after Edaily reported on Monday, November 2, that Yuanta Securities Korea expects the cosmetics original design manufacturer to deliver a stronger third quarter. The brokerage projects consolidated revenue of 815 billion won, up 39 percent year over year, and operating profit of 83 billion won, compared with 42.7 billion won a year earlier.

Orders support the earnings outlook

Yuanta attributes the forecast to strong order intake from Korean and international cosmetics clients. Revenue at Cosmax's Korean subsidiary is expected to reach 565 billion won, an increase of 47 percent, as export and overseas-channel orders offset fewer operating days during the summer vacation period and the Chuseok holiday.

The brokerage also expects a recovery in color cosmetics after a period of weaker demand, supported by new product launches and promotional activity from major clients. Skincare demand remains the main growth driver.

Overseas units add momentum

US subsidiary revenue is forecast to rise 71 percent to 63 billion won, supported by repeat and new orders from indie brands and established customers. China is expected to grow 21 percent on a consolidated basis, while Indonesia and Thailand are projected to expand by 30 percent and 25 percent, respectively.

Yuanta kept its Buy rating and target price of 363,000 won. The brokerage said earnings estimates are rising even as the share price has corrected, widening the gap between the market valuation and the operating outlook. That assessment remains an analyst view rather than a guarantee of future performance.

Cosmax business profile

Cosmax develops and manufactures cosmetics for brand customers through an original design manufacturing model. Its activities include skincare and color cosmetics, with operations spanning Korea, the United States, China and Southeast Asia. The company serves both established and independent beauty brands, giving it exposure to the international K-beauty supply chain.