Dongkook Pharmaceutical’s overseas cosmetics growth gains momentum; profitability expected to improve

[Financial News] Korea Investment & Securities said Dongkook Pharmaceutical is expanding its cosmetics and health functional food businesses, transforming from a traditional pharmaceutical company into a comprehensive healthcare company. It did not issue an investment rating or a target price.
Kang Eun-ji, an analyst at Korea Investment & Securities, said in a report on the 23rd that “Centellian24, launched using TECA (a standardized extract of Centella asiatica) technology applied to the wound-treatment product Madecassol, is growing rapidly not only in Korea but also in the U.S. and Japan.”
Dongkook Pharmaceutical sells active pharmaceutical ingredients and finished medicines in around 60 countries, including Korea, the European Union (EU), Japan and the Middle East. It has recently been expanding its healthcare business, which includes derma cosmetics and health functional foods. It is also pursuing a plan to change its name to “DK Centellian,” highlighting Centellian24.
Revenue in the first half of this year rose 11.5% from a year earlier to 509.9 billion won, while operating profit increased 12.6% to 53.4 billion won. The operating margin was 10.5%.
Revenue from the healthcare division, which includes cosmetics, rose 39.8% to 202.9 billion won. The division’s share of total revenue also increased by 5.7 percentage points, from 34.1% last year to 39.8% in the first half of this year. Over the same period, revenue from the over-the-counter and prescription drug divisions was 90.8 billion won and 115.2 billion won, respectively.
Centellian24 sells products including Madeca Cream, ampoules, the Madeca Prime beauty device and sheet masks. Building on the brand recognition of Madecassol, it highlights benefits such as soothing and regenerating the skin and strengthening the skin barrier.
The company is also expanding its overseas distribution network. In the U.S., it has entered Amazon, Costco and Ulta Beauty, while in Japan it sells products through retailers including Don Quijote and Loft. It expects export growth to continue in the fourth quarter, supported by Amazon’s Black Friday event in the U.S. and Japan’s Mega Wari event.
Factors cited for improved profitability included overseas sales of Uresco, a treatment for benign prostatic hyperplasia, and a product portfolio reshaped around high-margin over-the-counter medicines. The company also expects increased cosmetics exports to generate operating leverage.
Kang said, “Expanding the global business and optimizing the product portfolio could improve not only top-line growth but also profitability,” adding, “The cosmetics business’s export momentum will continue in the fourth quarter.”

[email protected] Lee Jeong-hwa Reporter