Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

Equity Bottom-Up

<ul>
<li>Sephora recently announced that 19 OLIVE YOUNG curated Korean cosmetic brands will become available at 500+ Sephora stores in the U.S. and at Sephora.com.</li>
<li>Unlike the semiconductor sector where the industry cyclicality is highly volatile, the global consumers' preference for Korean cosmetics could well last much longer for the next 3-5 years. </li>
<li>Korean cosmetics exports reached a record high of $7.0 billion in 1H 2026, up 27.3% YoY. The primary export destinations were the US at $1.45 billion (up 41.5% YoY).</li>
</ul>


Sephora recently announced that 19 OLIVE YOUNG curated Korean cosmetic brands will become available at 500+ Sephora stores in the U.S. and at Sephora.com.
Unlike the semiconductor sector where the industry cyclicality is highly volatile, the global consumers' preference for Korean cosmetics could well last much longer for the next 3-5 years. 
Korean cosmetics exports reached a record high of $7.0 billion in 1H 2026, up 27.3% YoY. The primary export destinations were the US at $1.45 billion (up 41.5% YoY).


Olive Young Partners With Sephora to Target 500+ Stores With 19 Curated Korean Cosmetic Brands

Cross Asset Strategy

<ul>
<li>Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.</li>
<li>In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.</li>
<li>The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.</li>
</ul>


Now that Lee Jae-Myung has become new South Korean President, the uncertainty revolving who will lead South Korea in the next five years is now over.
In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the market for the remainder of 2025.
The four investment themes include Korean Holdcos/Quasi Holdcos, Korean Cultural Contents, Securities, and SK Group Companies.


Lee Jae-Myung Becomes the New South Korean President - Four Investment Themes That Could Outperform

<ul>
<li>The net short selling balance in KOSPI reached 12.6 trillion won as of 20 October. This is the largest amount ever.</li>
<li>The top 5 companies in KOSPI with highest short selling balance/market cap ratio include Kakaopay, L&amp;F, Hanmi Semiconductor, Cosmax, and LG H&amp;H. </li>
<li>Net short position In KOSDAQ as a percentage of total KOSDAQ market cap more than doubled from 0.5% as of 31 March to 1.1% as of 21 October 2025.</li>
</ul>


The net short selling balance in KOSPI reached 12.6 trillion won as of 20 October. This is the largest amount ever.
The top 5 companies in KOSPI with highest short selling balance/market cap ratio include Kakaopay, L&amp;F, Hanmi Semiconductor, Cosmax, and LG H&amp;H. 
Net short position In KOSDAQ as a percentage of total KOSDAQ market cap more than doubled from 0.5% as of 31 March to 1.1% as of 21 October 2025.


A Sharp Increase in Short Selling Balance in the Korean Stock Market Past Seven Months

<ul>
<li>NFC (265740 KS) is a Korean cosmetics company which has rapidly increased its ODM business sales in the past two years. </li>
<li>NFC's customers include Equalberry, Cellimax, Dr. Althea and Beauty of Joseon, brands whose products are increasingly visible outside Korea.</li>
<li>Based on consensus net profit estimate of 18.5 billion won (2027E) and a 12x P/E, this would result in a market cap of 222 billion won (91% higher than now). </li>
</ul>


NFC (265740 KS) is a Korean cosmetics company which has rapidly increased its ODM business sales in the past two years. 
NFC's customers include Equalberry, Cellimax, Dr. Althea and Beauty of Joseon, brands whose products are increasingly visible outside Korea.
Based on consensus net profit estimate of 18.5 billion won (2027E) and a 12x P/E, this would result in a market cap of 222 billion won (91% higher than now). 


Equity Long-Short Analyst

Pyari Menon

Thematic (Sector/Industry)

<ul>
<li>Procter &amp; Gamble Co (PG US), Amorepacific Corp (090430 KS), L'Oreal SA (OR FP), <a href="https://www.smartkarma.com/entities/lg-household-health-care" target="_blank" data-smartkarma-citation="entities:6501:1" rel="noopener">LG Household &amp; Health Care (051900 KS)</a>,  and Kao Corp (4452 JP), lead product innovation table</li>
<li>Among the smaller names <a href="https://www.smartkarma.com/entities/cosmax-inc" target="_blank" data-smartkarma-citation="entities:4491:1" rel="noopener">Cosmax Inc (192820 KS)</a>, Pola Orbis Holdings (4927 JP),  <a href="https://www.smartkarma.com/entities/kolmar-bnh-co-ltd" target="_blank" data-smartkarma-citation="entities:33240:1" rel="noopener">Kolmar BNH (200130 KS)</a>, have been relatively prolific in innovating over the last three years.</li>
<li>Apart from the quality of the ingredients, consistency, stability of the formulations, the packaging, dispensing, virtual try-on, personalized recommendations, sustainability seem to be some of the key trends in innovations.</li>
</ul>


Procter &amp; Gamble Co (PG US), Amorepacific Corp (090430 KS), L'Oreal SA (OR FP), LG Household &amp; Health Care (051900 KS),  and Kao Corp (4452 JP), lead product innovation table
Among the smaller names Cosmax Inc (192820 KS), Pola Orbis Holdings (4927 JP),  Kolmar BNH (200130 KS), have been relatively prolific in innovating over the last three years.
Apart from the quality of the ingredients, consistency, stability of the formulations, the packaging, dispensing, virtual try-on, personalized recommendations, sustainability seem to be some of the key trends in innovations.


Insights from Datamining Technical Publications - Cosmetics

South Korea

Cosmax, Inc. is a cosmetics manufacturer. The Company develops and produces a variety of cosmetics for men and women, such as basic and special skin care, makeup, hair care, and other beauty products. Cosmax manufactures its products on original equipment manufacturing (OEM) basis.

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Cosmax Inc (192820 KS)

Olive Young Partners With Sephora to Target 500+ Stores With 19 Curated Korean Cosmetic Brands

Recent major partnership between Sephora and CJ Olive Young, the strong export growth of Korean cosmetics in 1H26, and the recent outperformance of...

Douglas Kim

Lee Jae-Myung Becomes the New South Korean President - Four Investment Themes That Could Outperform

In this insight, we discuss four investment themes (related to Lee Jae-Myung becoming the new South Korean President) that could outperform the...

Douglas Kim

A Sharp Increase in Short Selling Balance in the Korean Stock Market Past Seven Months

Net short selling balance in KOSPI was 12.6 trillion won as of 20 October, the largest amount ever. This suggests an increasing desire by many...

Douglas Kim

Korea Small Cap Gem #70: NFC Corp

NFC (265740 KS) is a Korean cosmetics company which has rapidly increased its ODM business sales in the past two years. It is deeply undervalued.

Douglas Kim

Insights from Datamining Technical Publications - Cosmetics

The beauty industry - where innovation can be real and driven by science, but sometimes just cosmetic to just change the perception

Pyari Menon

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