PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close
Organic Tea Cosmetics, a China-based infant skincare maker, has posted four straight years of annual losses but recorded its first quarterly operating and net profit in Q2 2026 alongside a sharp revenue jump.
Q2 2026 revenue reached KRW 74.5bn with an operating profit of KRW 14.0bn, the first quarterly profit in the recent five-quarter window
Operating and net losses persisted for four consecutive years from 2022 to 2025, with equity shrinking from KRW 399.0bn to KRW 263.7bn
2025 operating cash flow deteriorated to negative KRW 66.4bn, warranting separate scrutiny of cash generation beyond reported earnings
The company has repeatedly conducted stock consolidations amid tightened penny-stock delisting discussions, resuming trading after a share-merger relisting in June 2026
China's pro-birth policy and infant-product market growth remain the core growth narrative, though the earnings impact so far has been limited
Organic Tea Cosmetics is a Hong Kong/China-linked holding company listed on KOSDAQ in November 2016, producing and selling cosmetics for infants and children in China through its subsidiary Haitian Pharmaceutical.
Centered on its own brand "Tea Baby," the company offers seven product series spanning skincare, cleansing, and functional categories, using tea extracts sourced from the Wuyishan mountain range along with natural ingredients such as saponins, polyphenols, and camellia oil.
Distribution runs mainly through agency networks covering pharmacies and specialty baby stores in tier-2 and tier-3 Chinese cities, with demand patterns varying by product category, season, and region.
Skincare products reportedly sell relatively better in dry seasons and northeastern China, while cleansing products see stronger demand in summer and southern China.
In 2022 the company established Nanping Shi'ai Daily Necessities Co. to cut costs, and in 2024 it set up an Indonesian subsidiary to expand overseas and reduce reliance on the Chinese domestic market.
The firm has also attempted diversification into non-core areas such as footwear and fashion in the past, though contribution from businesses outside core cosmetics appears limited.
Domestic comparables include infant-focused brands such as Zero to Seven and Mediance, and building brand recognition remains a key challenge amid competition from both local and global players in China.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩47.3B | -₩19.3B | −40.8% |
| 2025Q3 | ₩47.4B | -₩28.8B | −60.6% |
| 2025Q4 | ₩60.9B | -₩5B | −8.2% |
| 2026Q1 | ₩39.5B | -₩7.1B | −17.9% |
| 2026Q2 | ₩74.5B | ₩14B | 18.8% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩238.1B | -₩67.4B | -₩100.2B | −28.3% | −25.1% | 18.7% |
| 2023 | ₩195.3B | -₩81.4B | -₩87.7B | −41.7% | −30.4% | 31.7% |
| 2024 | ₩176.2B | -₩68.9B | -₩50.8B | −39.1% | −18.8% | 24.6% |
| 2025 | ₩187.5B | -₩62.9B | -₩78.7B | −33.5% | −29.8% | 22.7% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
Annual revenue fell for three straight years from KRW 238.1bn in 2022 to KRW 195.3bn in 2023 and KRW 176.2bn in 2024, before edging up to KRW 187.5bn in 2025.
Operating losses persisted for four consecutive years — KRW -67.4bn (operating margin -28.3%) in 2022, KRW -81.4bn (-41.7%) in 2023, KRW -68.9bn (-39.1%) in 2024, and KRW -62.9bn (-33.5%) in 2025 — with the loss ratio bottoming in 2023 and gradually narrowing thereafter.
Net income attributable to owners swung between KRW -100.2bn in 2022, KRW -87.7bn in 2023, KRW -50.8bn in 2024, and KRW -78.7bn in 2025, without a clear improving trend.
On a quarterly basis, revenue was KRW 47.3bn with an operating loss of KRW -19.3bn in Q2 2025, and KRW 47.4bn with a wider loss of KRW -28.8bn in Q3 2025, before the loss narrowed sharply to KRW -5.0bn on revenue of KRW 60.9bn in Q4 2025.
Q1 2026 saw revenue slip to KRW 39.5bn with an operating loss of KRW -7.1bn, but Q2 2026 revenue jumped to KRW 74.5bn, producing an operating profit of KRW 14.0bn and a net profit of KRW 13.0bn — the first quarterly profit within the recent five-quarter window.
This remains a single-quarter result, however, as the trailing four quarters (Q3 2025 through Q2 2026) still show a combined net loss of about KRW -29.2bn.
Equity has steadily declined from KRW 399.0bn in 2022 to KRW 263.7bn in 2025 due to cumulative losses, while the debt ratio rose from 18.7% in 2022 to 31.7% in 2023 before easing back to 22.7% in 2025.
Operating cash flow deteriorated from +KRW 75.5bn in 2022 to KRW -8.4bn in 2023, KRW -37.8bn in 2024, and KRW -66.4bn in 2025, notably a faster pace of cash burn even as reported losses narrowed on a percentage basis.
China's infant cosmetics market is assessed to be growing on the back of rising living standards, greater attention to child health, and stronger preference for natural ingredients.
Commentary on Q1 2026 results also cited these structural demand drivers alongside China's pro-birth policies as factors expected to boost sales.
However, the pace at which such policy expectations translate into actual sales growth has been gradual, as the company's annual revenue has largely stagnated or declined since 2022.
The competitive landscape features both Chinese local brands and global players vying for share, making brand strength and distribution expansion an ongoing challenge.
Domestically listed infant-product and cosmetics peers such as Zero to Seven and Mediance tend to move on similar policy themes, but as a China-capitalized firm, this company has followed a different trajectory from beneficiaries of expanding Korea-China cosmetics trade.
Credibility concerns that have affected many China-linked companies listed on KOSDAQ are cited as a structural factor weighing on this stock's valuation as well.
Disclosures and research materials indicate the company plans to launch infant cosmetics and maternity skincare products, and expects sales growth from China's pro-birth policies.
Q1 2026 results noted a 32.6% year-on-year revenue increase alongside operating and net losses narrowing by 23.3% and 6.2% respectively, alongside these new-product and policy expectations.
Whether the Q2 2026 swing to profit is connected to such new-product launches or seasonal demand recovery will need to be confirmed through the persistence of results in subsequent quarters.
The operating status and revenue contribution of the Indonesian subsidiary established for overseas expansion also remain to be specifically confirmed.
Separately, amid tightened discussions on penny-stock delisting requirements, the company has repeatedly carried out share consolidations, most recently resuming trading on June 24, 2026 following a relisting tied to a share merger.
Should such capital structure changes recur, they could affect free-float share counts and investor composition, warranting confirmation through future disclosures.
The current share price is assessed to trade at a substantial discount to net asset value, reflecting years of sustained losses and shrinking equity.
Brokerage commentary has previously noted that this stock has traded at valuations low relative to its results, partly due to broader credibility concerns surrounding China-linked listed companies.
On the earnings side, a single-quarter swing to profit was confirmed in Q2 2026, but the trailing four-quarter sum still sits in net-loss territory, making it premature to view profit recovery as firmly on track. No recent dividend has been confirmed, consistent with the ongoing loss and shrinking-equity situation.
Assessing valuation going forward requires further confirmation through upcoming quarterly results of whether the single-quarter profit turn is a one-off factor or a signal of structural improvement.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04
Q2 2026 revenue jumped to KRW 74.5bn from KRW 39.5bn the prior quarter, producing an operating profit of KRW 14.0bn and net profit of KRW 13.0bn—the first quarterly profit within the recent five-quarter window.
Since the sharp revenue increase drove improvement across the entire income statement, whether this trend holds into the next quarter is the key point to watch. This marks a notable reversal signal after four straight years of annual losses.
China's infant cosmetics market is assessed to keep growing amid rising living standards, greater attention to child health, and stronger preference for natural ingredients. The company plans to launch infant cosmetics and maternity skincare products and expects sales growth from China's pro-birth policies. If policy momentum coincides with new product launches, the revenue base could expand.
The debt ratio declined from 31.7% in 2023 to 22.7% in 2025, and the operating margin loss narrowed from -41.7% in 2023 to -33.5% in 2025. This shows a gradual improvement in the loss structure without excessive expansion of financial leverage.
Still, this remains improvement within a loss-making state and should be distinguished from an actual turn to profitability.
The company posted operating and net losses for four consecutive years from 2022 to 2025, during which equity shrank by roughly 34% from KRW 399.0bn to KRW 263.7bn. A single quarter's profit turn is not yet sufficient to conclude this structural trend has reversed. If cumulative losses continue eroding equity, concerns over financial stability could resurface.
Operating cash flow deteriorated from +KRW 75.5bn in 2022 to KRW -8.4bn in 2023, KRW -37.8bn in 2024, and KRW -66.4bn in 2025. Unlike the narrowing loss ratio on the income statement, the pace of cash burn has actually accelerated, warranting scrutiny of the gap between reported earnings and cash generation. Continued cash outflows could necessitate further capital raising or asset sales down the road.
Amid tightened discussions on penny-stock delisting requirements, the company carried out share consolidations in both 2024 and 2026, with trading resuming following a relisting on June 24, 2026. In April 2026 the stock was designated as an investment-caution issue, coinciding with a single-day decline of 16.76%.
Such repeated capital structure changes and sharp price swings can pose additional trading risks for retail investors.
Quarterly revenue and earnings have swung widely, moving from an operating loss of KRW -28.8bn in Q3 2025 to KRW -5.0bn in Q4 2025 and then to a profit of KRW +14.0bn in Q2 2026. This volatility may reflect a mix of seasonal and one-off factors, making it difficult to draw firm trend conclusions. Confirming the sustainability of the profit turn will require observing subsequent quarterly results.
The cosmetics business is exposed to Chinese regulatory changes, raw material supply, and distribution policy shifts, and the actual timing and intensity of pro-birth policy implementation carry uncertainty.
As a China-capitalized company, changes in the regulatory and control environment can directly affect business operations. If policy expectations fail to translate into results, pressure for valuation reassessment could emerge.
Regulatory moves to address penny stocks and the company's investment-caution designation history carry uncertainty related to listing maintenance requirements. Repeated share consolidations can affect free-float share counts and supply-demand dynamics, and whether market confidence recovers remains to be seen.
As a China-linked company, concerns over information accessibility and trust among domestic investors have been raised repeatedly.
Around the statutory deadline for the Q3 2026 report, check whether the Q2 profit turn continues into the third quarter.
Check the impact of China's Singles' Day (Double Eleven) e-commerce shopping event sales trends on Q4 revenue.
Review the FY2026 annual business report (including audit report) to reconfirm annual results, equity, and debt ratio changes.
Watch for additional disclosures on the Indonesian subsidiary's operating and revenue contribution, or on the launch of new infant/maternity products.
Given the prior investment-caution designation history, continue monitoring for designation or lift announcements and their stated reasons.
Organic Tea Cosmetics is a China-linked infant cosmetics maker that posted annual losses for four consecutive years from 2022 through 2025, during which equity fell from KRW 399.0bn to KRW 263.7bn and operating cash flow steadily deteriorated.
However, a notable shift occurred in Q2 2026 when revenue surged to KRW 74.5bn, producing an operating profit of KRW 14.0bn and net profit of KRW 13.0bn — the first profit turn within the recent five-quarter window.
Still, the trailing four quarters combined remain in a net-loss position, and whether the single-quarter profit reflects seasonal factors or a structural improvement requires further confirmation through upcoming results.
Structurally, the company benefits from China's pro-birth policies and growth in the infant products market, but credibility concerns and a history of repeated stock consolidations and trading halts have added variables to investor assessment.
On the financial side, some improvement signals are evident, such as the debt ratio easing from 31.7% in 2023 to 22.7% in 2025, though equity erosion from cumulative losses remains ongoing.
Overall, with earnings volatility and listing-related risks coexisting, gauging whether the Q2 2026 profit turn is a one-off event or a sustained trend will be central to future assessment.
Report written 2026-09-05 · Data as of 2026-09-04
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