Cosmax: Earnings Recovery and a Sharp Share Price Rise, with Rising Leverage and Negative Free Cash Flow

Thesis

The data supports an earnings recovery story. Operating margin rose from 3.3% in 2022 to 8.2% in 2025 and 7.9% on a trailing basis, and net income grew from ₩20.8B in 2022 to ₩123.1B in 2025. Trailing net income reached ₩184.3B as of H1 2026, with ROE of 32.9%.

The share price has moved faster than the fundamentals visible here. The stock is up 60.3% in three months and 44.5% in one year, and the P/E has gone from 15 at end-2025 to 18.2 now, while P/B has gone from 3.3 to 5.2. The data does not show why the stock re-rated beyond news headlines about cosmetics exports and new partnerships.

The balance sheet and cash flow are weaker points. Trailing free cash flow is -₩70.6B and liabilities are 276.1% of equity. Filings from 2026-09-01 cover a loan decision, a short-term borrowing increase and debt guarantees for others, but the data gives no amounts. Investor flow, foreign ownership and short balance data are not available.

Business overview

Cosmax is a KOSPI-listed company in the cosmetics sector, listed on 2014-04-07, with 11,349,509 listed shares and co-CEOs listed as 최경 and 이병만. The data gives no breakdown of products, customers or regions.

Revenue has grown from ₩1.59T in 2021 to ₩2.40T in 2025. Growth was 0.5% in 2022, 11.1% in 2023, 21.9% in 2024 and 10.7% in 2025. Trailing revenue as of H1 2026 is ₩2.66T. Recent news headlines mention cooperation with Woongjin Healthcare-related partners on cosmetics development and production, and a Maeil Business Newspaper piece on strong October cosmetics exports and expected earnings for Cosmax and Korea Kolmar.

Financial analysis

All figures below come from filed financial statements (DART), consolidated where available.

Revenue was ₩2.40T in 2025 (up 10.7%), with operating income of ₩195.8B (8.2% margin) and net income of ₩123.1B. In 2024 revenue was ₩2.17T, operating income ₩175.4B (8.1%) and net income ₩85.8B. In 2022 operating margin fell to 3.3% and net income to ₩20.8B, and in 2021 operating margin was 7.7%.

Trailing as of H1 2026: revenue ₩2.66T, operating income ₩210.4B (7.9% margin), net income ₩184.3B (6.9% net margin). Net income is high relative to operating income, and the data does not explain the gap. ROE rose from 3.6% in 2022 to 23.9% in 2025 and 32.9% trailing.

Cash is ₩336.7B, trailing free cash flow is -₩70.6B, and liabilities to equity are 276.1%. Borrowings are not available in the data.

Valuation

Current multiples: P/E 18.2, P/B 5.2, P/S 1.3, EV/EBITDA 10.6 and dividend yield 1.1%, with enterprise value of about ₩3.0T. Against its own year-end 2025 figures (P/E 15, P/B 3.3), both multiples are higher. Earlier year-end multiples are not available.

Among listed peers in the data, Kolmar Korea trades at P/E 17 and P/B 3.1, so Cosmax is slightly higher on both. Amorepacific is at P/E 27 and P/B 1.4, APR at P/E 31 and P/B 20.7, and LG H&H at P/B 0.7 with no P/E. d'Alba Global has no multiples available. The peer spread is wide, so the comparison is only a rough guide.

Catalysts

• Cosmax holds frequent investor relations events, with filings on 2026-08-26 and 2026-09-07, 09-09, 09-16, 09-18 and 09-30, which may shape market expectations.
• News on 2026-10-13 reports cooperation with Woongjin-related beauty companies on product development and production.
• A Maeil Business Newspaper headline points to strong cosmetics exports in October and expected earnings for Cosmax and Korea Kolmar.
• The next financial statements will show whether trailing net income of ₩184.3B and the 7.9% operating margin hold.
• Insider shareholding reports were filed on 2026-09-03 and 2026-10-06, though the data does not show the direction or size of the changes.

Risks

• Trailing free cash flow is -₩70.6B, so earnings are not currently converting into free cash.
• Liabilities are 276.1% of equity, and the 2026-09-01 filings on borrowing and debt guarantees for others may add to leverage, though amounts are not in the data.
• The share price is up 60.3% in three months and near its 52-week high, and P/E and P/B are above their end-2025 levels.
• Operating margin of 7.9% is slightly below 2025's 8.2%, and the recent profit rise has not come with higher margins.
• Investor flow, foreign ownership and short-selling data are unavailable, so market positioning cannot be assessed.

Closing view

The filed numbers show a clear recovery in revenue, margins and returns since 2022, and the share price has risen sharply alongside it. At the same time, valuation multiples have expanded, free cash flow is negative and leverage is high, with new borrowing and guarantee filings whose size is not disclosed in the data. The picture is of improving earnings paired with a higher price and a more stretched balance sheet, and missing flow and borrowing data limit how far conclusions can go.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Report history

1. Oct 13, 2026InitiationCosmax: Earnings Recovery and a Sharp Share Price Rise, with Rising Leverage and Negative Free Cash Flow