Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cosmecca-korea" target="_blank" data-smartkarma-citation="entities:23616:1" rel="noopener">Cosmecca Korea (241710 KS)</a> clocked revenue of KRW115.7B (up 15% YoY) and operating profit of KRW11.2B (up 265% YoY) in Q223. Operating profit margin expanded 670bps YoY to 9.7%.</li>
<li>Cosmecca is a key beneficiary of the increasing global demand for the affordable indie cosmetics brands. These brands are now outpacing the overall beauty and personal care industry.</li>
<li>Since reporting strong Q1 result in May, Cosmecca Korea shares are on fire. Cosmecca is expected to continue its growth momentum due to strong global demand for affordable cosmetics.</li>
</ul>



Cosmecca Korea (241710 KS) clocked revenue of KRW115.7B (up 15% YoY) and operating profit of KRW11.2B (up 265% YoY) in Q223. Operating profit margin expanded 670bps YoY to 9.7%.
Cosmecca is a key beneficiary of the increasing global demand for the affordable indie cosmetics brands. These brands are now outpacing the overall beauty and personal care industry.
Since reporting strong Q1 result in May, Cosmecca Korea shares are on fire. Cosmecca is expected to continue its growth momentum due to strong global demand for affordable cosmetics.


Cosmecca Korea (241710 KS): Strong 2Q23 Result; Favorable Industry Tailwind to Enhance the Glow

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>In this insight, we provide the major changes in NPS' stakes in 25 Korean companies in 3Q 2023.</li>
<li>In 3Q 2023, NPS reduced its stakes in the IT, construction, and contents related stocks. On the other hand, NPS increased its stakes in China's re-opening and cosmetics related stocks.</li>
<li>Five Korean cosmetics stocks that NPS net purchased in 3Q 2023 are up on average 12.8% from end of June 2023 to as of 6 October 2023. </li>
</ul>


In this insight, we provide the major changes in NPS' stakes in 25 Korean companies in 3Q 2023.
In 3Q 2023, NPS reduced its stakes in the IT, construction, and contents related stocks. On the other hand, NPS increased its stakes in China's re-opening and cosmetics related stocks.
Five Korean cosmetics stocks that NPS net purchased in 3Q 2023 are up on average 12.8% from end of June 2023 to as of 6 October 2023. 


<ul>
<li>In this insight, we discuss 10 small cap cosmetic stocks in Korea, which are up on average 26.6% YTD, outperforming KOSPI which is up 10.9% YTD. </li>
<li>The drivers of their strong share price performances include reopening after the COVID-19 pandemic and ending of nearly all pandemic related restrictions (including wearing of face masks).</li>
<li>Among the 10 companies, we would focus on the top five small cap cosmetics stocks with the highest growth in operating profit in 1Q 2023 including Cosmecca Korea and Clio.</li>
</ul>


In this insight, we discuss 10 small cap cosmetic stocks in Korea, which are up on average 26.6% YTD, outperforming KOSPI which is up 10.9% YTD. 
The drivers of their strong share price performances include reopening after the COVID-19 pandemic and ending of nearly all pandemic related restrictions (including wearing of face masks).
Among the 10 companies, we would focus on the top five small cap cosmetics stocks with the highest growth in operating profit in 1Q 2023 including Cosmecca Korea and Clio.


Focus on 5 Korean Small Cap, Cosmetics Stocks With Significant Growth in Operating Profit in 1Q 2023

Equity Capital Markets

<ul>
<li>Our base case valuation of Manyo Factory is target price of 29,555 won per share, which represents 111% higher than the high end of the IPO price range.</li>
<li>We estimate the company to generate sales of 147.7 billion won in 2023 (up 45.1% YoY) and its operating margins to improve from 24.1% in 2022 to 24.7% in 2023. </li>
<li>We believe a 20% premium valuation multiple to the comps is appropriate due to its higher sales growth rate, higher operating margins, and higher ROE than the comps.</li>
</ul>


Our base case valuation of Manyo Factory is target price of 29,555 won per share, which represents 111% higher than the high end of the IPO price range.
We estimate the company to generate sales of 147.7 billion won in 2023 (up 45.1% YoY) and its operating margins to improve from 24.1% in 2022 to 24.7% in 2023. 
We believe a 20% premium valuation multiple to the comps is appropriate due to its higher sales growth rate, higher operating margins, and higher ROE than the comps.


<ul>
<li>Manyo Factory is well known for its functional skin care products made from naural ingredients. Its products have been enjoying excellent sales in Japan and Korea.</li>
<li>Given the company's superior sales growth and operating margins than its peers combined with the large IPO discount, there is likely to be a strong interest in Manyo Factory IPO. </li>
<li>Unlike other major Korean cosmetic companies with poor sales and operating profit in the past three years, Manyo Factory experienced excellent growth of its sales and profits in this period. </li>
</ul>


Manyo Factory is well known for its functional skin care products made from naural ingredients. Its products have been enjoying excellent sales in Japan and Korea.
Given the company's superior sales growth and operating margins than its peers combined with the large IPO discount, there is likely to be a strong interest in Manyo Factory IPO. 
Unlike other major Korean cosmetic companies with poor sales and operating profit in the past three years, Manyo Factory experienced excellent growth of its sales and profits in this period. 


South Korea

Clio Cosmetics Co., Ltd. manufactures and markets lines of skin care and make-up products.  The Company owns multiple brands including Club Clio Professional, Peripera, and Goodal.

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Clio Cosmetics (237880 KS)

Cosmecca Korea (241710 KS): Strong 2Q23 Result; Favorable Industry Tailwind to Enhance the Glow

Cosmecca Korea reports strong Q2 results, with revenue up 15% YoY and operating profit up 265% YoY. The company benefits from the growing demand...

Tina Banerjee

What Did NPS Buy and Sell in 3Q 2023?

In this insight, we provide the major changes in NPS' stakes in 25 Korean companies in 3Q 2023. In 3Q 2023, NPS reduced its stakes in the IT,...

Douglas Kim

Focus on 5 Korean Small Cap, Cosmetics Stocks With Significant Growth in Operating Profit in 1Q 2023

We would focus on the top five Korean small cap cosmetics stocks with the highest growth in operating profit in 1Q 2023 including Cosmecca Korea...

Douglas Kim

Manyo Factory IPO Valuation Analysis

Our base case valuation of Manyo Factory is target price of 29,555 won per share, which represents 111% higher than the high end of the IPO price...

Douglas Kim

Manyo Factory IPO Preview

Given the company's superior sales growth and operating margins than its peers combined with the large IPO discount, there is likely to be a strong...

Douglas Kim

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Cosmecca Korea (241710 KS): Strong 2Q23 Result; Favorable Industry Tailwind to Enhance the Glow

​Cosmecca Korea reports strong Q2 results, with revenue up 15% YoY and operating profit up 265% YoY. The company benefits from the growing demand...

Tina Banerjee

What Did NPS Buy and Sell in 3Q 2023?

In this insight, we provide the major changes in NPS' stakes in 25 Korean companies in 3Q 2023. In 3Q 2023, NPS reduced its stakes in the IT,...

Douglas Kim

Focus on 5 Korean Small Cap, Cosmetics Stocks With Significant Growth in Operating Profit in 1Q 2023

We would focus on the top five Korean small cap cosmetics stocks with the highest growth in operating profit in 1Q 2023 including Cosmecca Korea...

Douglas Kim

Manyo Factory IPO Valuation Analysis

Our base case valuation of Manyo Factory is target price of 29,555 won per share, which represents 111% higher than the high end of the IPO price...

Douglas Kim

Manyo Factory IPO Preview

Given the company's superior sales growth and operating margins than its peers combined with the large IPO discount, there is likely to be a strong...

Douglas Kim

Cosmecca Korea reports strong Q2 results, with revenue up 15% YoY and operating profit up 265% YoY. The company benefits from the growing demand...