SK Securities on the 13th reiterated its "buy" recommendation on Kolmar Korea (KOSPI: 161890) and raised its target price from 140,000 won to 170,000 won, citing second-quarter 2026 operating profit that beat the market consensus by 16%.
Kolmar Korea — South Korea's largest ODM (original design manufacturer) of cosmetics, which formulates and produces beauty products on behalf of brand owners — reported second-quarter 2026 (April–June) revenue of 861.3bn won and operating profit of 110.3bn won, up 18% and 50% respectively year on year. The operating margin reached 13%, with both revenue and operating profit setting all-time quarterly records simultaneously.
The standout performer was the Korean parent entity on a standalone basis. Its revenue rose 31% year on year to 430.4bn won, while operating profit climbed 44% to 70.8bn won. Demand was concentrated in skincare and sun-care product lines serving fast-scaling brands, and the operating margin improved by 1.5 percentage points year on year as operating leverage kicked in on higher volumes.
Subsidiary Yonwoo also contributed handsomely, posting second-quarter revenue of 91.1bn won (up 29%) and operating profit of 7bn won (an increase of 6.2bn won). The American subsidiary was a blemish on the picture, however, with revenue of 17.8bn won representing a 3% contraction year on year. SK Securities nevertheless argued that the business is improving structurally, as Kolmar's US operations reduce their dependence on a narrow base of colour-cosmetics clients and increase revenue from global multinational corporations (MNCs).
Conventional wisdom in the market has held that the second quarter marks Kolmar Korea's seasonal peak, driven by sun-care demand. SK Securities challenges that assumption. Pointing to a robust order book for base skincare products, the brokerage estimates that the Korean parent entity's third-quarter revenue will be broadly flat with the second quarter at 431.8bn won — up 34% year on year. For the full year, it forecasts revenue of 3.173tn won and operating profit of 339bn won.
The medium-to-long-term growth engine, the report argues, lies in new project wins with global MNC clients. Kolmar has been supplying products to one such customer since the fourth quarter of 2025, and feedback from both the client and end consumers is said to be encouraging. SK Securities sees scope for additional projects in that client's luxury and mass-market segments from 2027 onwards.
The new target price is derived by applying an 18x price-to-earnings multiple to a 12-month forward earnings-per-share estimate of 9,454 won — a valuation in line with the upper end of the range seen during the 2024–25 re-rating cycle. Based on the closing price of 132,500 won on the 12th, the implied upside is 28.3%.
Some caveats are warranted, however. SK Securities assigns a "buy" rating to 93.84% of the stocks it covers, which limits the informational value of any individual recommendation. The US subsidiary's revenue decline also remains a live concern. And while the "other subsidiaries" segment eked out an operating profit of 1bn won in the second quarter, SK Securities itself expects the combined third- and fourth-quarter result to slip back into the red.
On the export mix, Europe and North America are driving growth, while China's recovery remains modest. The Chinese subsidiary's second-quarter revenue of 58bn won showed improvement, but the rebound from its prior peak has been limited. Investors should also keep a watching brief on any broader softening in global demand or a cooling of the K-beauty wave.
Kolmar Korea's full-year 2026 operating profit is forecast at 339bn won, up 41.3% from 240bn won in the prior year. Measured against the 194bn won earned in 2024, that would represent a near-75% increase in operating profit in just two years. SK Securities projects further growth in 2027, with operating profit reaching 399bn won.