Korean brokerages raise Cosmax target prices on expected Q3 earnings beat
In short
Two Korean securities firms raised their target prices for cosmetics maker Cosmax on Oct 7, saying third-quarter results should come in above market consensus. Hana Securities lifted its target to 380,000 won from 305,000 won, and Daol Investment & Securities raised its target to 350,000 won from 290,000 won. Both kept buy ratings.
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Two Korean securities firms raised their target prices for cosmetics maker Cosmax on Oct 7, both saying the company’s third-quarter results should exceed market expectations. Hana Securities lifted its target to 380,000 won from 305,000 won, a 24.6% increase, and kept a buy rating, according to Chosun Ilbo, Maeil Business and Korea Economic Daily. Daol Investment & Securities raised its target to 350,000 won from 290,000 won and also kept a buy rating, Yonhap reported. [ 1 , 2 , 3 , 4 ]
Hana Securities estimated Cosmax’s third-quarter operating profit at 79 billion won, up 85% from a year earlier and above the 67.7 billion won consensus, Maeil Business reported. Daol forecast revenue of 844 billion won, up 44.1%, and operating profit of 78.7 billion won, up 84.2%, which its analyst said would be about 15% above consensus, according to Yonhap. [ 2 , 4 ]
By segment, Hana Securities expected domestic headquarters revenue to grow 45%, with China and US unit revenue up 25% and 70% respectively, and said Southeast Asian operations were turning around. It forecast domestic operating profit to rise 78% to more than 60 billion won, the first time above that level in a quarter, helped by rising skincare share, a recovery in color cosmetics and better gel mask efficiency. Hana said Cosmax’s US business was seeing steady reorders and new orders from local indie and legacy clients, while the Shanghai unit was expected to grow 30% and Guangzhou more than 20%. [ 2 ]
Daol Investment & Securities attributed the outlook to a large increase in orders at the Korean unit despite fewer working days, pointing to strength in skincare and a turnaround in color cosmetics. It also said Cosmax’s Korean production capacity was expected to rise 10% to 1.1 billion units by the end of the year. [ 4 ]
Park Jong-dae, an analyst at Hana Securities, said the second quarter had resolved uncertainties over domestic profitability, a swing to operating profit in the US business and a Southeast Asian turnaround, and that the third quarter would show the company breaking the industry’s usual strong-first-half, weak-second-half seasonality. Daol’s Park Jong-hyun said the Korean unit’s growth would push third-quarter operating profit above consensus. Cosmax closed the previous session at 298,000 won. [ 1 , 2 , 4 ]
Why it matters
The notes point to continued momentum in K-beauty exports, with both brokerages expecting Cosmax’s third-quarter operating profit to grow sharply from a year earlier despite a typically weak season. Cosmax is described by Hana Securities as the world’s largest cosmetics original design manufacturer, so its order trends are a read on overseas demand for Korean beauty products. The forecasts are analyst estimates, not reported results.
Key facts
- Hana Securities raised its target price for Cosmax to 380,000 won from 305,000 won, a 24.6% increase, and kept a buy rating [ 1 , 2 , 3 ]
- Daol Investment & Securities raised its target price for Cosmax to 350,000 won from 290,000 won and kept a buy rating [ 4 ]
- Hana Securities estimated Cosmax’s third-quarter operating profit at 79 billion won, up 85% from a year earlier and above the 67.7 billion won consensus [ 2 ]
- Daol estimated third-quarter revenue of 844 billion won, up 44.1%, and operating profit of 78.7 billion won, up 84.2%, about 15% above consensus [ 4 ]
- Cosmax shares closed the previous session at 298,000 won [ 1 , 4 ]
- Hana Securities expects the domestic headquarters, China and US units, and Southeast Asian operations to all grow [ 2 ]
- Both brokerages said the third quarter results would break the industry’s usual pattern of a strong first half and a weak second half [ 1 , 2 ]
Confirmed by several sources
Still unclear
- Whether Cosmax’s actual third-quarter results will match the brokerage forecasts Both Hana Securities and Daol Investment & Securities published estimates ahead of the results; the documents do not say when Cosmax will report actual figures.
- Daol Investment & Securities’ target price of 350,000 won This figure appears in only one document, the Yonhap report on the Daol note.
- The full contents of the Chosun Ilbo report Only a truncated feed summary was available, so its detailed third-quarter revenue and operating profit figures could not be read.
What local media are saying
Timeline, local time
- Chosun Ilbo publishes a report on Hana Securities’ raised target price and third-quarter earnings outlook for Cosmax [ 1 ]
- Maeil Business publishes details of the Hana Securities note, including third-quarter estimates and analyst comments [ 2 ]
- Korea Economic Daily publishes a report on the Hana Securities note [ 3 ]
- Yonhap reports that Daol Investment & Securities also raised its Cosmax target price [ 4 ]