Sunjin Beauty Science

Sunjin Beauty Science primarily manufactures cosmetics raw materials such as UV filter materials, microbeads and skincare ingredients, supplying them based on nanotechnology and encapsulation technology. Its business scope extends from raw material supply to ODM cosmetics manufacturing and its own brand, 'irecipe'.

Its client base includes major global and domestic brands such as L'Oréal, Chanel, Lancôme, Hermès, LVMH, Estée Lauder, LG Household & Health Care and Amorepacific. Overseas sales account for roughly 80% of total revenue, and the company exports raw materials to about 50 countries.

It operates overseas subsidiaries in China, the United States and Italy, and plans to establish an additional subsidiary in Indonesia this year.

On the production side, the company's second plant in Janghang, completed in 2019, became the first inorganic UV filter facility in Asia outside Japan to receive an FDA No Action Indicated (NAI) rating, and it passed another FDA inspection last year.

In July of last year, the company invested KRW 25.4 billion to build a new OTC (over-the-counter) cosmetics manufacturing plant (OTCM) at the Janghang national eco-industrial complex, expanding its manufacturing infrastructure for future growth.

This diversification strategy—from raw material supplier toward ODM/OTC manufacturing and its own brand—has been the central theme of recent years.

Consolidated revenue for 2025 was KRW 80.77 billion, up 1.8% from KRW 79.37 billion in 2024, marking a fifth consecutive record year. However, operating profit fell nearly 43% to KRW 6.06 billion from KRW 10.64 billion in 2024, and the operating margin dropped sharply from 13.4% to 7.5%.

Net income attributable to owners also declined, from KRW 9.12 billion to KRW 5.96 billion. This margin compression reflects concentrated investment costs last year tied to the entry into ODM/OEM business, the launch of the in-house brand 'irecipe', and preparation for the new OTC plant.

On a quarterly basis, operating profit narrowed to KRW 0.70 billion in Q3 2025, and the company posted an operating loss of KRW 0.41 billion on revenue of KRW 17.77 billion in Q4 2025.

The trend then reversed, with revenue of KRW 22.73 billion and operating profit of KRW 1.52 billion in Q1 2026, followed by revenue of KRW 23.57 billion and operating profit of KRW 1.68 billion in Q2 2026, extending profitability for two consecutive quarters.

Still, Q1 2026 operating profit was down roughly 60% year-over-year, suggesting margins have not yet fully returned to 2024 levels. Trailing four-quarter (Q3 2025 to Q2 2026) net income attributable to owners totaled KRW 4.99 billion, indicating earnings volatility between quarters remains meaningful.

In 2022, net income was unusually large at KRW 19.63 billion, reflecting a one-off gain from a factory sale that inflated the bottom line relative to that year's 8.3% operating margin.

South Korea's cosmetics and beauty industry continued to grow in the second quarter and first half of 2026.

According to an analysis by Cosmorning of 86 cosmetics and beauty companies that filed half-year reports, 68 companies (79.1%) posted revenue growth in Q2, while 26 recorded operating losses, with 14 of those seeing losses widen—underscoring that revenue growth and profitability improvement do not always move together.

Revenue growth leaders were split among ODM/OEM manufacturers such as Cosmax, Kolmar Korea and Cosmecca Korea, global distributors such as Silicon2, and emerging brands such as APR and Dabon Global, pointing to broad-based growth across the K-beauty ecosystem from brands to ODM/OEM to distribution.

Sunjin Beauty Science sits within this ecosystem as both a raw material supplier and an ODM/OTC manufacturer, positioning it to capture demand from both expanding brand companies and growing ODM/OEM producers.

However, the raw material business tends to be sensitive to individual brand customers' purchasing cycles and inventory policies, while the ODM/OTC manufacturing segment puts the company in direct competition with larger ODM players such as Cosmax and Kolmar Korea.

Amid continued profitability polarization across the industry, a key point to watch is whether the company's new business expansion can settle into the growth cohort.

The company has set a target of surpassing KRW 100 billion in revenue in 2026 by expanding its ODM business and raising the proportion of direct overseas sales of raw materials.

A company representative said the first half was focused on stabilizing the ODM business and brand marketing, with earnings improvement expected in the second half driven by OTC manufacturing and raw material sales.

Another representative noted that after a first-half phase of strategic investment, cost structure stabilization and contributions from Southeast Asian operations would accelerate full-year earnings improvement from the second half.

Analysts expect the company to move into a genuine profit-generating phase in the second half, following a first half weighed down by large brand marketing and fixed-cost investments, with strengthened responsiveness to Indonesian customers and the recognition of previously delayed OTC volumes cited as key factors for normalizing the earnings structure.

No confirmed operational timeline has been disclosed yet for the planned Indonesian subsidiary, so the actual timing of its revenue contribution requires further confirmation.

Potential expanded local supply tied to changes in US FDA regulations, along with full-scale operation of the OTC/OEM plant, are cited as key variables for growth in UV filter materials and manufacturing.

That said, these targets and outlooks are based on statements from company and industry sources, and actual achievement will need to be confirmed through future quarterly disclosures.