Beauty stocks with “record earnings” rise as AI chip stocks wobble... Hydrogel mask supply shortage

[Financial News]  Domestic and international beauty stocks have been gaining ground as concerns over the profitability of artificial intelligence (AI) investments have recently increased volatility in semiconductor stocks such as Samsung Electronics and SK hynix. In South Korea, cosmetics companies posting record earnings are drawing attention, while manufacturers of hydrogel masks—facing a surge in overseas orders—are also in the spotlight.
According to financial industry sources on the 18th, as of the closing price on the 16th (local time), U.S. companies Estée Lauder and Ulta Beauty had risen 6.62% and 3.96%, respectively, over the past week. Their gains over the month stood at 9.35% and 11.77%, respectively. As AI-related stocks enter a correction phase, beauty stocks—with resilient consumer demand and earnings growth—are emerging as an alternative in the rotation of investments.
A similar trend has emerged in South Korea. As of 2:30 p.m. on the 16th, d'Alba Global Co., Ltd. was up 10.02% from the previous trading day, while APR had risen 9.23%. Silicon2 and Kolmar Korea also gained 8.49% and 7.10%, respectively, as brand, distribution and manufacturing companies advanced together.
Earnings are also providing support. In the second quarter of this year, APR and d'Alba Global Co., Ltd. posted operating profits of 190.6 billion won and 47.2 billion won, respectively, setting quarterly records. Cosmetics original development manufacturing (ODM) companies including Cosmax, Kolmar Korea and Cosmecca Korea, as well as Silicon2 and Pum-Tech Korea, also posted record earnings, demonstrating K-beauty's growth.
Hydrogel masks, in particular, are attracting attention as growing overseas demand coincides with barriers to entering the manufacturing business. Because production lines capable of ensuring consistent quality and yield are difficult to scale up quickly, orders are concentrated among companies with mass-production experience. Hana Securities also said that rising demand in the U.S. and European markets has left hydrogel mask supply unable to keep pace with demand.
Genic, a leading manufacturer, posted record quarterly results in the second quarter of this year, with revenue of 49.2 billion won and operating profit of 10 billion won. Its operating margin reached 20.3%. The company is increasing supply capacity by expanding its production lines from eight in the first quarter to 11 in the second quarter, and adding a 12th line in July.
Despite its earnings growth, Jin Cos Tec saw its share price struggle in the early days after listing. On the 15th, the first day of its transfer listing to KOSDAQ, its shares closed down 36.4% from the offering price. The decline is believed to have been driven by the fact that shares available for trading amounted to 46.16% of total shares, compounded by weakness in the broader market. On the next trading day, the stock ended near unchanged, easing the sharp decline.
By contrast, its earnings growth is clear. On a separate financial statement basis, it posted record annual results last year, with revenue of 48.6 billion won and operating profit of 4.85 billion won. In the first half of this year, revenue and operating profit rose 33.5% and 33.9%, respectively, from a year earlier. According to the company, it cannot fulfill all orders even with production running day and night and has been unable to accept some new orders. It plans to expand production capacity by about 40% by adding a third plant and begin mass production in April 2027. Amid rising overseas demand, securing production capacity is emerging as a key factor in future earnings growth.
A beauty industry official said, “Overseas orders for hydrogel masks are growing rapidly, but it is difficult to expand production capacity for these products in a short period. Earnings differences will become increasingly pronounced among companies that have secured stable yields and mass-production facilities.”


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