[E-Daily Reporter Kim Hyung-il ] SANGSANGININVESTMENT&SECURITIES maintained its “Buy (BUY)” investment rating and target price of 140,000 won for COSMECCA KOREA CO.,LTD.(241710). The firm projected that, amid a continued steady flow of orders for the domestic subsidiary, the expansion of production capacity following the start of operations at the Ochang plant next year and the recovery in earnings at the U.S. subsidiary, Englewood Lab, Inc., will serve as drivers of medium- to long-term growth. However, it anticipated that the improvement in consolidated operating profit for the third quarter would be limited due to a lull in orders from a major client of the U.S. subsidiary, Englewood Lab Korea (EWLK).

On the 19th, Song Ji-yeon, an analyst at SANGSANGINVESTMENT&SECURITIES, estimated that COSMECCA KOREA CO.,LTD.’s third-quarter consolidated revenue would reach 223.1 billion won, a 22.3% increase year-over-year, while operating profit would rise 11.9% to 30.4 billion won.

The domestic subsidiary is expected to see revenue rise 35% year-over-year, driven by expanded orders for skincare products. The operating profit margin is projected to remain steady at 13.6%, similar to the previous quarter. The firm noted that despite the domestic subsidiary’s robust growth, weak performance from the U.S. subsidiary will limit the improvement in consolidated results.

Performance is expected to vary by subsidiary within the U.S. business. Englewood Lab, Inc. (EWL) is expected to see revenue decline by only 3% as orders for over-the-counter (OTC) sun care products continue to come in. In contrast, Englewood Lab Korea (EWLK) is projected to see revenue fall by 32% year-over-year due to a lull in orders from major existing clients. Compounded by a rise in the cost-to-sales ratio due to the strong won, EWL’s consolidated operating profit margin is forecast to slow to 14.8%.

The Chinese subsidiary is expected to see a 10% year-over-year decline in revenue and post an operating loss of 1 billion won, as revenue recovery has been delayed despite efforts to diversify its customer base.

Analysis suggests that the recent supply issues with raw materials stemmed from a disparity in growth rates between brand companies and raw material suppliers. Analyst Song explained that Company B, a key client, grew rapidly, with revenue reaching 233.7 billion won in 2025—a 483.8% increase year-over-year—and first-quarter revenue this year also surging 565% year-over-year to 161.6 billion won.

Although a temporary bottleneck occurred because some container suppliers—sourced directly by the client—could not keep up with the surge in demand, the delays were limited to a single day. COSMECCA KOREA CO.,LTD. responded by implementing overtime, special shifts, and outsourced production after receiving the raw materials. It was determined that most of these issues would be resolved by the third quarter, so the impact on earnings is expected to be limited.

The medium- to long-term growth outlook remains positive. Production capacity is expected to expand next year as the Ochang plant begins operations in phases. The company also cited the recovery of Englewood Lab, Inc.’s performance—driven by U.S. clients’ production diversification and repeat orders from major clients—as a key factor for growth.