PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Prices as of the 2026-10-02 close
Colorray, the leading supplier of pearl pigments to China's cosmetics industry, is diversifying into AI- and robot-related new materials amid a sharp decline in profitability.
2025 consolidated revenue fell to KRW 44.58bn from KRW 48.74bn a year earlier, with operating margin thin at 0.5%
2025 net profit attributable to owners swung to a loss of KRW -0.82bn from a KRW 0.89bn profit in 2024, driven largely by a sharp Q4 loss
Net profit returned to positive territory in Q1-Q2 2026, though quarter-to-quarter volatility remains high
The debt ratio stood at a low 15.4% in 2025 and operating cash flow held around KRW 8.7bn, indicating a still-conservative balance sheet
A Future Industry Technology Institute launched in Q3 2025 is pursuing new materials for AI thermal management, wearables, and robotics
Colorray operates under Hong Kong-incorporated holding company Colorray Holdings, with its core manufacturing subsidiary based in Zhejiang, China, focused on the R&D, production, and sale of pearl pigments for cosmetics.
The company has vertically integrated into mica powder and synthetic mica production, aiming to secure both cost competitiveness and quality consistency. It holds the leading market share in China's cosmetics pearl pigment market and has been expanding into the United States, Europe, and South Korea.
The company holds the number-one market share in China's cosmetics pearl pigment market and is expanding into markets in the United States, Europe, and South Korea. Its key customers include global cosmetics ingredient and ODM firms such as Intercos of Italy and KOBO of the United States.
Through continuous R&D, the company has secured strong technological capability and supplies high-quality pearl pigments to global companies including Intercos of Italy and KOBO of the United States. On the capacity side, the completion of a new production base in 2024 secured annual production capacity of 6,000 tons.
Its product lineup extends beyond standard pearl pigments to high-value-added effect pigments such as optical color-change and Stark Metal series, broadening applications from cosmetics into industrial coatings and exterior finishes.
Colorray showcased its effect pigment lineup and various application solutions, centered on its optical color-change and Stark Metal series. More recently, the company has been pursuing a strategic pivot away from a cosmetics-ingredient-centric structure toward new materials for AI and advanced equipment manufacturing.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩11.4B | ₩400M | 3.5% |
| 2025Q3 | ₩14.2B | ₩500M | 3.7% |
| 2025Q4 | ₩6.8B | -₩1.5B | −22.4% |
| 2026Q1 | ₩12.3B | ₩1.4B | 11.4% |
| 2026Q2 | ₩9.6B | ₩700M | 6.8% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩41B | ₩11.6B | ₩12.2B | 28.4% | 4.5% | 5.2% |
| 2023 | ₩50.9B | ₩6.2B | ₩5.8B | 12.3% | 2.1% | 17.5% |
| 2024 | ₩48.7B | ₩200M | ₩900M | 0.4% | 0.3% | 18.9% |
| 2025 | ₩44.6B | ₩200M | -₩800M | 0.5% | −0.3% | 15.4% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-05
Annual revenue peaked at KRW 50.92bn in 2023 after rising from KRW 40.98bn in 2022, before declining for two consecutive years to KRW 48.74bn in 2024 and KRW 44.58bn in 2025.
The more pronounced shift is in margins: operating margin fell from 28.4% in 2022 to 12.3% in 2023, then to just 0.4% in 2024 and 0.5% in 2025 — essentially break-even levels.
Net profit followed a similar path, from KRW 12.23bn in 2022 and KRW 5.83bn in 2023 down to KRW 0.89bn in 2024, before turning to a net loss of KRW -0.82bn in 2025.
On a quarterly basis, modest profitability persisted through Q2 2025 (revenue KRW 11.41bn, operating profit KRW 0.40bn) and Q3 2025 (revenue KRW 14.19bn, operating profit KRW 0.53bn), but Q4 2025 saw revenue collapse to KRW 6.83bn with an operating loss of KRW -1.53bn and a net loss of KRW -2.08bn, driving the full-year deterioration.
In 2026, Q1 showed a clear recovery with revenue of KRW 12.32bn, operating profit of KRW 1.41bn, and net profit of KRW 0.63bn, though Q2 moderated to revenue of KRW 9.58bn, operating profit of KRW 0.65bn, and net profit of KRW 0.20bn.
Summing the most recent four quarters (Q3 2025 through Q2 2026), net profit attributable to owners remains in negative territory, indicating the large Q4 loss has not yet been fully offset.
On the balance sheet, however, the debt ratio improved from 18.9% in 2024 to 15.4% in 2025, and operating cash flow stayed stable at around KRW 8.8bn in both 2024 and 2025, largely independent of the earnings volatility.
China's color cosmetics market has shown double-digit growth in recent years. China is a major consumer of color cosmetics, and the market has grown at an average annual rate of 13% over the past three years.
The broader Chinese cosmetics market is also expanding, with the market, valued at USD 10.84 billion in 2026, expected to grow at a compound annual rate of 8.9% to reach USD 16.61 billion by 2031.
However, growth has not been evenly distributed, as domestic Chinese brands have grown rapidly with improved quality, while foreign brands have also been aggressively expanding, intensifying competition further upstream in the pearl pigment supply market.
Against this backdrop, Colorray has relied on its number-one market share and vertically integrated cost structure, but the steep decline in operating margin over recent years — from 28.4% to 12.3% to 0.4% to 0.5% — suggests it is feeling both market maturation and rising competitive pressure.
This contrasts with its early growth phase, when revenue grew from KRW 13.6bn in 2013 to KRW 38.8bn the following year, averaging 42% annual growth, with operating profit rising from KRW 3.1bn to KRW 22.4bn over the same period.
Beyond cosmetics pearl pigments, effect pigment applications are expanding into automotive, plastics, and coatings, and Colorray has been widening its industrial-market touchpoints through participation in coating and film exhibitions.
In Q3 2025, the company established a Future Industry Technology Institute, formalizing its shift from a cosmetics-ingredient-centric business toward an AI and new-materials convergence company.
Colorray has been running the Future Industry Technology Institute since Q3 2025 to secure future growth drivers, actively pursuing research combining artificial intelligence and new materials.
The institute applies AI-based algorithms to pigment composition, particle structure, and optical property analysis, focusing on shortening new product development cycles and improving performance prediction accuracy.
On specific applications, the company stated it is piloting a smart production line using mica-based composite materials, and based on this technology is pursuing development of thermal management materials for high-performance AI computing devices, flexible materials for smart wearable devices, and new materials for humanoid robot components.
In August 2025, it also obtained official certification as a 'national advanced-level smart factory' from China's Ministry of Industry and Information Technology, and stated it would formally operate two new-material R&D production lines specialized in AI and advanced equipment manufacturing.
Through 2026, the company has continued participating in exhibitions such as Coating Korea, PCHI, and in-cosmetics Korea, presenting both its cosmetics-grade effect pigments and industrial application solutions.
That said, no numerical guidance on revenue contribution timing or specific order and mass-production plans for the new business has been disclosed, so the pace of commercialization needs to be confirmed through future filings and results.
Colorray posted a net loss in 2025 before returning to profit in the first half of 2026, so quarter-to-quarter volatility should be kept in mind when interpreting profitability metrics.
The share price trades at a level well below the company's net asset value, which can be read as reflecting both earnings uncertainty and the broader market discount often applied to China-based issuers listed in Korea. The company currently pays no dividend, so dividend-related metrics are not applicable.
Because earnings have been oscillating around breakeven, tracking revenue and margin trends alongside the progress of the new-materials business may be more informative than relying on conventional earnings multiples.
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 2026-09-05
Colorray maintains the top market share in China's cosmetics pearl pigment market, managing both cost and quality through a vertically integrated structure that includes in-house mica powder and synthetic mica production.
It also maintains relationships with global clients such as Intercos of Italy and KOBO of the United States, providing a stable revenue base. A new production base completed in 2024 secured annual capacity of 6,000 tons.
The company launched a Future Industry Technology Institute in Q3 2025 to pursue thermal management materials for AI computing devices, flexible materials for wearables, and new materials for humanoid robot components.
It also obtained national advanced-level smart factory certification from China's Ministry of Industry and Information Technology, bolstering the credibility of its production base. This could potentially be a step toward reducing reliance on cosmetics-market-driven revenue.
The debt ratio fell from 18.9% in 2024 to 15.4% in 2025, keeping the balance sheet conservative. Operating cash flow also remained stable at KRW 8.79bn in 2024 and KRW 8.76bn in 2025 despite earnings volatility, suggesting the company retains financial buffer even during a period of deteriorating profitability.
Operating margin has declined for four consecutive years, from 28.4% in 2022 to just 0.5% in 2025, approaching breakeven. Revenue also fell for two straight years after peaking at KRW 50.92bn in 2023.
This suggests the decline may reflect structural market maturation and intensifying competition rather than a temporary factor.
In Q4 2025, revenue plunged from KRW 14.19bn in the prior quarter to KRW 6.83bn, resulting in an operating loss of KRW -1.53bn and a net loss of KRW -2.08bn. Profit recovered in Q1 2026 but moderated again in Q2, showing a pattern of large and difficult-to-predict quarterly swings.
The AI/robotics new-materials research organization was only established in Q3 2025 and remains at an early research stage. No numerical disclosure has yet confirmed specific customer approvals, mass-production timing, or revenue contribution. There is a possibility of a significant time lag before the new business translates into actual results.
While China's color cosmetics market continues to grow, competition is intensifying as local brands improve quality and foreign brands expand aggressively. At the pigment supply level, local competitors continue to narrow the technology gap, potentially sustaining pricing and margin pressure. Fluctuations in mica raw material prices are also a factor that can affect profitability.
Because production and operating subsidiaries are all based in China, domestic Korean investors' information access may be relatively limited. Fluctuations in the CNY-KRW exchange rate can affect the won-translated consolidated results.
As is typical for foreign companies listed in Korea, there may be a market discount related to perceived accounting and disclosure reliability.
New materials for AI thermal management, wearables, and robotics remain at a pilot production and research stage, and it is not yet confirmed whether they will lead to actual customer approvals and mass production.
If costs from new business investment overlap with the already thin margins of the existing business, profitability could face additional near-term pressure. If technology commercialization is delayed, the gap between market expectations for the new business and actual results could widen.
Check the Q3 2026 (July-September) quarterly report to see whether revenue and margins continue recovering and whether a loss similar to Q4 2025 recurs
Watch for additional disclosures or IR materials on customer approvals, pilot production results, and revenue contribution from the Future Industry Technology Institute's AI thermal management, wearable, and robotics materials
Check the FY2026 annual business report for the audit opinion, full-year margin trend, and final confirmed net profit attributable to owners
Monitor the progress of the company's participation in revising China's national pigment standards and its potential impact on product competitiveness and certification
Colorray has long operated on the back of its number-one market position and vertically integrated cost structure in China's cosmetics pearl pigment market, but it has seen a marked profitability decline over the past three to four years, with operating margin falling from 28.4% to just 0.5%, and it posted a net loss in 2025.
Profit recovered in the first half of 2026, but quarterly volatility remains high, so it is unclear whether this constitutes a sustained trend.
The company is attempting a strategic pivot by launching a Future Industry Technology Institute in Q3 2025 to expand into AI thermal management, wearable, and robotics new materials, and has bolstered production credibility through national advanced-level smart factory certification.
However, the timing of revenue contribution and concrete commercialization plans for the new business remain at an early stage without numerical confirmation. On the balance sheet, a low debt ratio and stable operating cash flow suggest the company has some financial capacity to weather earnings volatility.
Investors should watch upcoming quarterly results and further disclosures on the new business's progress before forming a judgment.
Report written 2026-09-05 · Data as of 2026-09-04
This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.