Pulse News recently reported that the company’s sales grew 16% to 535.8 billion won over the last year, and stated that its beauty offering was a key factor behind this.
“The company’s eye cream, sunscreen stick and foundation products had been instant hits on home shopping channels”, Pulse News quotes a company official as saying. The rising appeal of cosmetics combined with a pharmaceutical technology element was also highlighted as a sales growth factor for the company.
Eyes on China
Looking ahead to the coming months, China is a key region on the company’s radar.
Kolmar Korea recently secured a 400 million yuan (USD $61.6 million) deal in China with door-to-door distribution company, Quanjian Group, to facilitate efficient export to the major beauty market.
The Korean company has also recently stated that it plans to build a cosmetics plant in Jiangsu Province, in order to keep up with rising demand in China. The new manufacturing facility, tipped to be completed by next year, is said to be four times bigger than the company’s current plant in Beijing.
Note of caution
Despite the strong outward appearance of the company’s recent performance, there are some key concerns for the brand and those interested in its share price.
When factoring in its holding company, operational costs have eaten into the company’s overall profit, leaving it 6% lower than this time last year, according to a recent report in The Korea Times.
Despite being strong, the company’s recent sales growth has failed to reach expected performance levels, reportedly due to China’s slowing domestic market.
On the back of this, and of fears that the company’s growth may, as a result, have peaked, brokerage house NH Investment & Securities has stated that it has cut Kolmar Korea’s target share price from 130,000 won, to 100,000 wonC.