Cosmetics stocks buoyed by ‘With Corona’ expectations 

Shares of cosmetics and skincare companies in South Korea have surged recently on expectations of easing pandemic-related restrictions. 

A few of these companies have already recorded positive performances in the last quarter, despite stay-at-home measures and mask mandates. 

Clio Cosmetics stocks surged 11% to close Thursday’s trade at 23,100 per share. The group owns its namesake Clio Professional makeup brand and five other beauty brands that are popular around the globe. 

iFAMILY SC Co. and Tony Moly shares jumped 15% and 9%, respectively. iFAMILY SC owns drugstore makeup brand Rom&nd and Tony Moly sells skincare and makeup products at stand-alone stores nationwide. 

Shares of COSMAX Inc. and C&C International, which specialize in receiving orders from and manufacturing products for different brands, escalated 7% and 14%, respectively. 

They are two of South Korea’s most popular original design manufacturers.

LG Household & Health Care, part of the LG Corp., climbed 5% to end the day’s trade at 1,028,000 won per share, exceeding the 1,000,000 won mark for the first time in a month. 

Amorepacific Corp. increased 4% to close at 187,500 won per share on Thursday. The conglomerate operates more than 30 beauty and personal care brands including the high-end label Sulwhasoo. 

South Korea’s slogan With Corona implies the easing of restrictions related to the COVID-19 pandemic and eventually living with herd immunity.

The US Centers for Disease Control and Prevention (CDC) announced Wednesday local time that the agency is reviewing its mask guidance. The agency’s director Dr. Rochelle Walensky explained the CDC is shifting its focus to COVID-19 hospitalizations as a key measure of the severity of the outbreak.

The market reacted to the news as a sign that restrictions in South Korea would be easing in the near future. 

Rumors that the Seoul city government was ceasing mask mandates also lifted market sentiment during the day. The local government quickly issued an administrative notice to confirm there is no change in the current policy of imposing penalties on those who do not wear masks in designated areas. 

Clio Cosmetics’ positive earnings report also buoyed investor sentiment. A day prior, the international cosmetics company announced Q4 operating profit of 4.6 billion won. The figure is 36% higher than the consensus estimate. 

Going forward, analysts expect makeup shares to show a stronger rebound than skincare stocks. As people wear masks less often, lipstick sales are expected to surge. 

“As people resume their social gatherings, cosmetics makers will enjoy robust sales,” Jo Mi-jin, an analyst at NH Investment & Securities said. “Makeup producers, in particular, tend to encourage buyers to purchase new products even before finishing the ones they’re currently using.” 

Write to Sul-Gi Lee at surugi@hankyung.com
Jee Abbey Lee edited this article.