[Edaily Reporter Shin Ha-yeon ] On the 6th, Yuanta Securities Korea maintained its “Buy (BUY)” investment rating for KOLMAR KOREA(161890), noting that the visibility of earnings growth has further improved based on the expansion of its domestic and international client base and high production utilization rates, and raised its target price by 28% from the previous 125,000 won to 160,000 won.

Lee Seung-eun, an analyst at Yuanta Securities Korea, stated, “Second-quarter earnings are expected to be in line with market expectations for operating profit, with revenue of 829.3 billion won and operating profit of 93.0 billion won,” adding, “We believe the robust growth momentum seen in the first quarter is continuing.”

The analyst noted, “The domestic subsidiary is benefiting from both steady reorders from existing top-tier clients and the expansion of new projects with global clients, which began generating significant revenue starting in the first quarter,” and “With domestic capacity utilization rates rising to around 90%, the burden of labor costs—which had been proactively increased during the process of nearly doubling capacity from 370 million units to 650 million units for 2023–2025—is expected to ease relatively this year due to a slowdown in capacity growth, leading to an improvement in the operating profit margin compared to the previous year,” the analyst explained.

He also predicted that overseas subsidiaries would continue to show gradual improvement. The analyst noted, “The U.S. subsidiary is still in the early stages of fulfilling orders from a new client that began in April, so production is slow, and it remains in the red due to rising exchange rates,” but added, “Cost management appears to be improving compared to last year.” He added, “For the Chinese subsidiary, the real growth rate—excluding the impact of exchange rates in the first quarter—has been maintained in the second quarter, and performance in April and May is understood to have already exceeded targets.”

The analyst projected that this growth momentum would continue into the second half of the year. “In the second half, we expect continued expansion of European exports for skincare brands, strong sales from high-growth indie brands, and continued growth in the overseas client base,” the analyst said. “With the burden of increased fixed costs following capacity expansion remaining limited, high capacity utilization rates are expected to be maintained, and the operating leverage effect is expected to take full effect.”

He continued, “We are raising our target price to reflect the fact that the visibility of earnings growth is higher than that of competitors.”