Korea Exchange (KOSPI) (KRX) · Consumer Defensive
Hankook Cosmetics Manufacturing Co., Ltd. 003350
MonitorScore band: 50–60
The thesis, in one sentence
A Korean cosmetics contract manufacturer with no brand and no analyst coverage has re-rated sharply in a few weeks, single-factory utilization is running hot on a soft average selling price, and shares from an exchangeable bond are starting to reach the free float.
Written for this site in plain English, without figures. The arithmetic is in the full report.
Key risks
- Current operating margin may be a cycle peak, not a sustainable level
- Single-factory utilization is high while average selling price is soft
- Exchangeable-bond conversion is adding new shares to the free float
What would change the verdict
- Revenue growth decelerates below the pace that justifies the current rating
- Share count rises further as exchangeable-bond conversion accelerates
- Days inventory outstanding rise for two consecutive quarters
- Net debt relative to EBITDA climbs into levered territory
Read it yourself
Step five of the method is the reader's: open the latest annual or quarterly report and read it before acting on anything here. A score is a summary, and a summary is not understanding.
This exchange has no stable per-company address, so the link opens the disclosure portal — search there for the ticker.
The deep report was written against the filings available on 2026-09-16; anything published since is not in it.
Price, one year
DCF valuation range
range of the DCF modelsbase casetoday's price
Valuation range, shape only. Figures in the full version.
Monte Carlo outcome shape
scenarios below today's pricescenarios above today's pricetoday's price
Distribution of simulated outcomes around today's price. Bar heights only; the scale and the percentiles are in the full version.
Where the money goes
Last four reported quarters, 2025-09 → 2026-06, in KRW. Filings data as gathered on 2026-09-16. Figures rounded to three significant digits.
Chapter one: Executive summary (1 page: thesis, estimated value, verdict)
Deep-value analysis (REFRESH) — 003350 (한국화장품제조 / Hankook Cosmetics Manufacturing Co., Ltd.)
Analysis date: September 16, 2026 · Exchange: KRX / KOSPI (code 003350) · Yahoo symbol: 003350.KS
Reference price: … (close 09.16.2026) · Reporting currency = price currency = KRW
Reference analysis: 08.24.2026, at …, verdict SMALL BUY · Price move since then: …
Regime: REFRESH — mechanical deep_delta.py trigger: falsifier pret > 12824 BROKE.
Why this isn't a cosmetic refresh. The broken falsifier said: "20.01% of share capital is a latent overhang via the exchangeable bond, ignored above a price of …." Between September 11 and 14, 2026 the overhang stopped being latent — holders began requesting the exchange, and the DART filing of 09.14.2026 documents it at the won level. In addition, the semi-annual report filed on 08.13.2026 (DART, 반기보고서 2026.06) became accessible and contains exactly the four pieces of information the August analysis had flagged as unavailable: the inventory breakdown by category, capacity utilization, related-party concentration, and the exact bond terms. All four were obtained this time from the primary filing, not from aggregators.
Executive summary (1 page: thesis, estimated value, verdict)
The underlying thesis hasn't changed and I inherit it in full: Hankook Cosmetics Manufacturing is a South Korean ODM/OEM cosmetics manufacturer, founded in 1962, the group's production entity (the distribution entity, 한국화장품, is listed separately under 123690 and is itself 20%-owned by 003350). No own brand, no guidance, a single factory, an extremely lean cost structure, and operating margins of 17… at a K-beauty cycle peak. Operating figures are unchanged from August, because no new quarter has appeared: TTM (Q3 2025 – Q2 2026) revenue …, EBIT 38,586 mil (margin 17.84%), net profit 32,026 mil, operating cash flow … mil. The next report (Q3 2026) comes in November.
What changed are three things, in order of importance.
1. The price rose 27.6% without a single new operating figure. At … the median of the five-model triangulation was …. At …, the same models, updated, give a median of …. The margin of safety wasn't consumed by a deterioration in the business; it was consumed by the quote. The key day was 09.11.2026: … (13,160 → …) on a volume of 11,798,448 shares — 1.7 times the entire free float of ~6.99 million, with two volatility halts, on a day when KOSPI was falling 2.4%. There is no company announcement that day explaining the move.
2. The 20.01% overhang started materializing, and I can document it. DART filing 20260914800640 shows: on 09.11 an exchange was requested for … face value (77,978 shares), on 09.14 another 2.0 bn (155,957 shares), cumulatively 233,935 shares = 1.03% of share capital. Remaining balance unchanged: …, i.e. 4,301,030 shares at the exchange price of … — equivalent to 61.5% of the current free float, in the hands of 18 financial institutions with a cost basis of 12,824 and the first put option on 10.14.2027. Every day spent above 12,824 is a day those shares have an economic reason to leave.
3. The semi-annual filing puts a physical ceiling on growth. The company discloses, for H1 2026, a production capacity of …, actual production of 89,149 mil, and an average utilization rate of 87.2% (838 of 960 hours). Even more important: the average selling price per unit is … in H1 2026, versus 1,823 in 2025 and 1,939 in 2024 — so the ASP is below the level of two years ago, while ethanol has gotten 14.0% more expensive and glycerin 39.7%. All of the 34.5% growth in H1 2026 is volume, not a single won comes from price. A factory at 87% utilization, with a real-terms declining selling price and rising input cost, doesn't compound 12% a year for ten years running — and the new factory, whose land was purchased in April 2026, still had, as of 08.13.2026, neither content, nor budget, nor an approved investment timeline.
Estimated value. Five models, all on 22.66 million shares (fully diluted):
| # | Model | IV/share (KRW) | MOS vs … |
|---|---|---|---|
| 1 | DCF FCFE bear (oe 20.0 bn · g1 5% · r 14% · gt 1.5%) | 8,413 | … |
| 2 | DCF FCFE base (oe 26.0 bn · g1 10% · r 13% · gt 2.0%) | 15,784 | … |
| 3 | DCF FCFE bull (oe 31.0 bn · g1 15% · r 12% · gt 2.5%) | 28,048 | … |
| 4 | EPV Greenwald (5-period average margin / r 13% + net cash − blocked affiliate receivable) | 9,533 | … |
| 5 | Historical multiples (own median EV/EBIT 2023-2025 = 7.0x on TTM EBIT) | 14,460 | … |
Median of the five: …. Monte Carlo across 20,000 scenarios gives median …, P10 …, P90 …, and a probability of undervaluation of …% — practically a coin flip, versus …% in August.
Verdict: HOLD / STOP BUYING. No adding above …. This isn't a sell: the business is real, earnings quality remains good, the balance sheet is solid, and the base case doesn't say the stock is expensive — it says it's fairly valued. But all three anchors that don't depend on extrapolating the peak margin (EPV …, historical multiples …, DCF bear …) are now below the price, and in August only one was. When the only model that still gives a decent return is the one that assumes the peak margin holds for ten years, you no longer have a margin of safety — you have an opinion. The disciplined re-buy threshold remains below … (below the bond's exchange price, where the overhang extinguishes automatically), and the position-trim threshold is above …, where even the base model turns negative.
Figures were removed from this excerpt. The full report opens free for five tickers a week — see what's open now.
Full report contents
- Executive summary (1 page: thesis, estimated value, verdict)
- 🔒 The business and the moat (how it makes money, competitive advantage, durability) (Available in the full report)
- 🔒 Management and capital allocation (track record, buybacks/dividends/acquisitions, skin in the game) (Available in the full report)
- 🔒 What changed over the last 4 quarters (balance sheet line by line from the data pack, margins, cash conversion — explain EVERY large variance) (Available in the full report)
- 🔒 Balance-sheet analysis — Quality of Earnings (Thornton O'Glove method) (Available in the full report)
- 🔒 CEO profile — Outsider traits (William Thorndike method) (Available in the full report)
- 🔒 Accounting red flags (accruals, dilution, one-offs, accounting-policy changes) (Available in the full report)
- 🔒 Triangulated valuation (conservative DCF with explicit assumptions + earnings power value + 5-year historical multiples + Monte Carlo from step 5; range, not point) (Available in the full report)
- 🔒 Pre-mortem (why the thesis could be wrong — 3 concrete scenarios) (Available in the full report)
- 🔒 Verdict versus the tracker's GBL score (convergence/divergence and why) (Available in the full report)
- 🔒 Appendix — what was inherited, what was re-derived, and corrections to the research brief (Available in the full report)
Evaluation history
| Date | Verdict |
|---|---|
| 2026-08-22 | Interesting |
| 2026-08-24 | Interesting |
| 2026-09-06 | Interesting |
| 2026-09-16 | Monitor |
Want the rest of this report?
Subscribe to get one full deep report a week by email, the day before it opens on the site.