[Edaily Reporter Shin Ha-yeon ] On the 25th, Daol Investment & Securities projected that KOLMAR KOREA(161890)would post second-quarter earnings exceeding market expectations, driven by improved profitability at its domestic subsidiaries and an expansion of its overseas client base. The firm maintained its “Buy” investment rating and target price of 140,000 won.

Park Jong-hyun, an analyst at Daol Investment & Securities, stated, “We expect the company to exceed consensus estimates due to an increase in orders from major clients,” adding, “The operating profit margin (OPM) is expected to continue improving.”

The firm estimated KOLMAR KOREA’s second-quarter consolidated revenue and operating profit at 8379억 won and 961억 won, respectively. This represents year-over-year increases of 15% and 31%, respectively, with the operating profit margin projected to reach 11.5%, exceeding market consensus.

In particular, the analysis suggests that improved profitability at the Korean subsidiary will drive the results. Analyst Park explained, “The peak season effect for the Korean subsidiary’s suncare business and moderate margin leverage will drive quarterly profit growth,” adding, “By subsidiary, we forecast the Korean subsidiary’s revenue to grow 25% year-over-year to 4112억 won.”

Diversification of client base was also cited as a positive factor. He said, “The growth momentum of domestic clients continues this quarter, with the sun care brands of the No. 1 and No. 4 clients maintaining stable performance, and the No. 4 client’s sun care sales also continuing to grow,” adding, “Sales expansion to global Original Design Manufacturer (ODM) clients is expected to gain momentum starting in the third quarter.”

He added, “We are building a balanced growth structure that reduces dependence on specific clients, while maintaining the top five clients’ share of total revenue at 30%.”

He also projected that overseas subsidiaries would continue their growth momentum. Analyst Park noted, “Revenue from the Chinese subsidiary is expected to reach 59.1 billion won, an 18% increase year-over-year,” assessing that “this marks a phase of gradual demand recovery.” He continued, “The U.S. subsidiary is continuing to expand exports to $1.4 billion and diversify its client base. With the FDA granting approval for a new suncare formulation for the first time in 27 years, domestic ODM companies handling a variety of suncare ingredients and formulations are expected to benefit in the medium to long term.”

Researcher Park emphasized, “We are seeing results that exceed market expectations, along with benefits from the overseas expansion of K-Beauty,” adding, “Despite a somewhat deteriorating business environment—including rising raw material prices—the company has maintained profitability through revenue growth.”