[Edaily Reporter Kim Kyung-eun ] On the 14th, NH INVESTMENT & SECURITIES raised its target price for SILICON 2 Co.,Ltd.(257720)by 12.5% from 48,000 won to 54,000 won, citing continued strong growth in cosmetics exports. The firm maintained its “Buy” rating.

Jeong Ji-yoon, an analyst at NH INVESTMENT & SECURITIES, stated in a report released that day, “Even when accounting for foreign exchange effects, the company is demonstrating stronger-than-expected revenue growth and profit trends compared to market expectations.”

SILICON 2 Co.,Ltd.’s consolidated revenue for the second quarter reached 402.6 billion won, a 52% increase year-over-year. Operating profit rose 59% to 83.0 billion won, exceeding the market consensus by 16.5%. Net profit also surpassed market expectations by 19.0%, driven by 1.1 billion won in tariff refunds and gains from the disposal of investment brands.

Growth by region was led by Europe and North America. Revenue in Europe rose 62% to 173.4 billion won. Revenue in North America increased 79% to 87.3 billion won. Revenue in Asia grew 29% to 57.5 billion won. Revenue in South America and Russia/Commonwealth of Independent States (CIS) also rose by 76% and 75%, respectively.

In Europe, the company diversified its customer base to include Boots, Superdrug, and Orient Trade. In North America, it expanded its presence with brick-and-mortar retailers such as Ulta and Target, recording its highest-ever quarterly revenue. In Asia, orders from TikTok Shop and Shopee increased, and sales in Indonesia recovered. In South America, revenue is expected to grow gradually as the company began operating its logistics center in Mexico in June and secured business partnerships in Brazil and Paraguay.

Growth continued year-over-year in most regions, excluding the Middle East. Sales in the Middle East decreased by 7% to 26 billion won. In contrast, major regions—including North America, Europe, South America, and Russia/CIS—recorded double-digit growth rates.

Profitability also improved. The cost-to-sales ratio for the second quarter was 68.0%, down 2.0 percentage points from the previous quarter. Favorable exchange rate effects contributed to the decline in the cost-to-sales ratio. However, the freight expense ratio rose to 3.4%, up 0.8 percentage points from the previous quarter, due to rising air freight rates and preemptive inventory buildup in Europe. While keeping other selling and administrative expenses—such as commission fees and advertising and promotional expenses—under control, the operating profit margin reached 20.6%.

NH INVESTMENT & SECURITIES projected that SILICON 2 Co.,Ltd.’s growth momentum would continue, centered on the U.S. and Europe. The revenue estimate for 2026 was raised by 3.6% from the previous 1.516 trillion won to 1.571 trillion won. Revenue estimates for 2027 and 2028 were also raised by 7.6% and 8.3%, respectively.

The 2026 operating profit estimate was raised to 290 billion won, a 7.4% increase from the previous forecast. Operating profit estimates for 2027 and 2028 were also raised by 12.1% and 12.7%, respectively.

Analyst Jeong noted, “The current stock price corresponds to a forward price-to-earnings ratio (P/E ratio) of 10.9 times for 2026, placing it in a range with low valuation pressure.”

The target price was calculated using 12-month forward net income attributable to controlling shareholders. The target price-to-earnings ratio (PER) was set at 13x, representing a 20% discount to the cosmetics sector’s average PER. Based on the closing price of 40,800 won on the 13th, the stock has 32% upside potential to reach the target price.