Cosmax stock rating downgraded to Neutral by JPMorgan on growth concerns

Published 13/08/2025, 06:56
Cosmax stock rating downgraded to Neutral by JPMorgan on growth concerns

Investing.com - JPMorgan has downgraded Cosmax Inc (KS:192820) from Overweight to Neutral, while reducing its price target to KRW210,000 from KRW290,000.

The rating change follows Cosmax’s second-quarter 2025 results, which JPMorgan notes were in line with its estimates but fell short of broader market expectations. While the company saw robust performance in Korea and Thailand, this was largely offset by weakness in the US, China, and Indonesian markets.

JPMorgan identified several concerns in its analysis, including limited operating profit margin expansion in domestic operations when excluding provision write-back impacts, and potential mix deterioration in domestic plant operations due to higher facial mask-related sales.

The firm also highlighted Cosmax’s guidance for mid-teens percentage growth in domestic plant sales for the third quarter, which would represent a quarter-over-quarter decline despite capacity additions. Additionally, JPMorgan noted there were no meaningful signs of recovery in the Chinese market.

Given these factors, JPMorgan expects Cosmax to face top-line deceleration against tougher comparisons going forward, with limited operating profit margin expansion that no longer justifies its historical high price-to-earnings valuation above 20x.

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