Korean cosmetics stocks soar on Chinese demand

Cosmetics shares are spiking over hopes that rising Chinese demand for Korean products will push up their quarterly earnings.

Shares of Hankook Cosmetics gained 0.6 percent to 15,600 won ($14.3) at the close of trading Wednesday, after hitting 17,500 won. The price is up more than 140 percent from 7,140 won a month ago.

“As we enter the new earnings season, investors are turning their eyes to cosmetics-related stocks that have shown strong momentum,” KB Investment & Securities analyst Yang Ji-hye said.

Market analysts said beauty product manufacturers will maintain a generally rosy outlook on the back of the rising demand from Chinese customers, along with their growth potential globally. 

Shares of Coreana Cosmetics, one of the oldest skincare brands here, edged up 0.67 percent to 7,540 won at the close after hitting 8,320 won.

Able C&C ― operator of the brands Missha and A’Pieu ― fell 4.6 percent to 32,650 won, as the anticipations for the firm to become leaner through restructuring waned. The once-dominant budget brand saw its operating profit drop 48.8 percent to 6.7 trillion won last year.

Cosmetics-makers are not alone in benefiting from the Chinese market.

Kyungnam Pharmaceutical’s stocks hit the ceiling for two consecutive days in a row, after Chinese newspaper People’s Daily ranked the company’s vitamin product “Lemona” as the No. 1 nutritional supplement product made in Korea. Its shares soared 14.89 percent to 5,940 won Wednesday afternoon.

Shares of Samick Musical Instruments, the nation’s leading piano-maker, reached a record high for the 52nd week in a row, as more Chinese parents are arranging piano lessons for their children. Samick’s shares edged up 1.78 percent to 5,150 won on Wednesday.

Hana Daetoo Securities analyst Lee Jeong-ki expected Samick’s China sales this year to jump about 65 percent to 69 billion won from 45 billion won last year.

By Suk Gee-hyun monicasuk@heraldcorp.com)