Dongkook Pharmaceutical Co. (086450.KS) is expected to sustain growth as it expands cosmetics exports centered on the U.S., Japan and China. Following gains in online sales, the company's overseas offline distribution network is also widening, which analysts say will drive a meaningful improvement in cosmetics profitability starting next year.
LS Securities maintained its buy rating and 30,000-won target price on Dongkook Pharmaceutical in a report on the 1st. That implies 39.5% upside from the previous session's close of 21,500 won. The brokerage estimated this year's consolidated revenue at 1.0279 trillion won, up 10.9% from a year earlier, and operating profit at 108 billion won, up 11.9%.
Cosmetics exports are the core growth driver. Dongkook Pharmaceutical's cosmetics exports rose to 30 billion won last year from 16.3 billion won in 2024, and are projected to reach 120 billion to 140 billion won this year. That is four to 4.7 times last year's level and exceeds the 100 billion won forecast at the start of the year. First-half exports came to 53 billion to 54 billion won, and quarterly export volumes are expected to grow through the second half.
A dedicated cosmetics export division created in 2024 and online marketing were cited as the foundation for that growth. Marketing through social media and influencers is paying off on online distribution channels such as Amazon and TikTok, analysts said. "We expect overseas offline entry to take place from 2026, with the offline distribution network expanding in 2027," said Jung Hong-sik, an analyst at LS Securities.
The export push is also expected to support profitability. The average selling price of Madeca Cream, a functional cosmetics product, is 2.5 to three times higher in the U.S. than in South Korea, so a larger share of overseas sales works in favor of earnings. Economies of scale from higher sales volumes are also expected. "This year we are spending heavily on marketing because exports are at an early stage, but the increase in fixed costs next year will be minimal," Jung said. "We expect a meaningful improvement in cosmetics profitability from 2027."
The company is also broadening its product lineup. Dongkook Pharmaceutical is building competitiveness in the dermocosmetics market through brands such as Centellian24 and Madeca Pharmacia, which use centella asiatica extract (TECA), the active ingredient in its Madecassol ointment. More recently, it has extended the lineup to serums, eye creams and eye patches that combine centella extract with polydeoxyribonucleotide (PDRN). LS Securities estimated this year's cosmetics revenue at 315 billion won, up 41.4% from a year earlier, and projected it would rise to 397.2 billion won next year.
