[Infostock Daily= Reporter An Hoe Hyun] Cape Investment & Securities maintained its investment opinion 'Buy' and target stock price of 130,000 won on the 14th, saying that the valuation gap between Cosmax and large brand companies based on expectations of a turnaround in the industry conditions is attractive.
Cape Investment & Securities predicted Cosmax's consolidated sales of 376.8 billion won and operating profit of 17.4 billion won in the fourth quarter of last year. This year's sales are expected to grow 10.4% year-on-year and operating profit is expected to grow 19.5% year-on-year.
It analyzed that the main reasons for the improvement in earnings were the Chinese corporation's drop in the operation rate of the plant due to COVID-19, this year's rise in sales and improved margins due to changes in contracts by some customers, the continued effect of adding a hand sanitizer line of a U.S. subsidiary, and the inclusion of new major customer companies in the first half of the year.
The growth axis of Cosmax this year is expected to be the United States and China. By corporation, sales in the United States are expected to increase 24.4% year-on-year for Cosmax USA and 92.5% for Nu-World. Both corporations were affected by a decrease in color cosmetics orders, but orders for hand sanitizers increased.
Sales of Chinese subsidiaries are expected to grow 4.0% year-on-year.
Reporter An Hoe Hyun ahh@infostock.co.kr
