[Edaily Reporter Kwon Oh Seok ] IBK Investment & Securities announced on the 10th that it is maintaining its “Buy” rating on PUM-TECH KOREA CO., LTD.(251970)and raising its target price from 80,000 won to 85,000 won.

Jo Kyung-jin, an analyst at IBK Investment & Securities, stated, “It is positive that operating leverage has been confirmed due to sustained demand for K-Beauty and improvements in production efficiency.” He added, “In particular, both the pump and tube divisions recorded operating profit growth that exceeded their revenue growth rates, and profitability improvements are evident. “We expect production efficiency to improve through the expansion of injection molding facilities at Plant 6 and the in-house production of previously outsourced volumes, as well as, in the medium to long term, through the expansion of Plant 7 and Miratech,” he said.
Previously, third-quarter consolidated revenue reached 123.8 billion won (up 26.7% year-over-year), and operating profit reached 25.1 billion won (up 64.0%), exceeding the operating profit estimate of 22.4 billion won (consensus: 22.6 billion won). He analyzed, “Growth in revenue and improved profitability occurred simultaneously due to increased orders from major unlisted clients and improvements in production efficiency. Coupled with the effect of price increases for certain products implemented starting in the second quarter, the operating profit margin rose by 4.6 percentage points year-over-year,” he analyzed.
In particular, the rise in the gross profit margin of the Pump Division (+4.3 percentage points) and the easing of SG&A expenses were key factors driving the increase in operating profit. The Pump Division posted revenue of 92.7 billion won (+23.8%) and operating profit of 18.5 billion won (+60.3%).
Analyst Cho explained, “Sales growth was driven by a 26% increase in revenue from domestic indie-brand clients and a 16% increase from overseas clients,” adding, “Sales of hair care products are on the rise, and we understand that products such as eye creams—in addition to the ‘Clear Rice’ sunscreen from our top client, Chosun Beauty—continue to show steady sales momentum on Amazon.”
The Tube Business Division posted revenue of 32.5 billion won (+49.1%) and operating profit of 7.5 billion won (+86.0%). He elaborated, “In the Tube Business Division as well, revenue from indie clients increased by 59% in line with the expansion of K-Beauty exports, and the division maintained high profitability thanks to reduced fixed-cost burdens resulting from the revenue growth and improvements in production efficiency.”