1、 Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.Issuer of report:The Hongkong and Shanghai Banking Corporation Limited,Seoul Securities Branch View HSBC Global Research at:h

2、ttps:/ Listen to our insightsFind out moreHSBCGlobal InvestmentResearchPodcasts Cosmetic names under our coverage are up by 47%y-t-d (vs KOSPI up 26%)on the back of strong export momentum ODMs outperformed brand companies:Cosmax shares up 81%y-t-d,the best performer(vs LG H&H up 12%)Maintain Buy rat

3、ings on ODMs and Amorepacific;Hold rating on LG H&H;raise TPs 2Q 2025 preview Typically,Chinese-led consumption such as sales at duty-free stores or China onshore have been key drivers for Korean cosmetics names.However,many cosmetic names have moved their focus elsewhere,including the US and Europe

4、.We believe investors should focus on companies that are doing well in markets where Korean brands are well received.As we approach the end of 2Q,we highlight that ODMs are likely to meet market consensus for 2Q 2025,whereas brand companies may miss street expectations(see figure 1).We highlight tha

5、t Amorepacifics US and Europe sales are likely to continue to grow by double digits y-o-y,although COSRX sales decline may be bigger than consensus expects.For LG H&H,for us to get more excited,we would need more confidence on the China turnaround,along with a rising contribution from other countrie

6、s.On ODMs,we continue to expect double-digit top-line growth,with continuous margin expansion thanks to strong growth at home.Prefer ODMs vs brand owners We now use 2026 as the base year in our valuations(from 2025)as we approach 2H 2025.There are no changes to our ratings or our SOTP valuation meth