Korean Biohealth Sector Sees Slowdown while Cosmetics Thrive in Profitability

The Korea Health Industry Development Institute stated on the 10th that an analysis of 967 companies in the biopharmaceutical, medical device, and cosmetics sectors revealed a slowdown in growth rates for the biohealth sector, especially in 2025. However, profitability has shown improvement, particularly in cosmetics, which despite a mild growth rate, continues to achieve asset expansion and enhanced profitability.

According to the analysis, the revenue growth rate for biohealth manufacturing firms is projected to decline from 10.5% in 2024 to 8.8% in 2025, and total asset growth is also expected to drop from 9.0% to 7.8%. This trend is attributed to the normalization of growth following exceptionally high figures from the previous year.

Within the sectors, the cosmetics industry reports a revenue growth decline from 18.1% to 15.7%, yet still records the highest growth rate among the three fields. In contrast, medical devices have seen an increase in growth from 1.5% to 6.4%, while pharmaceuticals have experienced a degrowth from 9.8% to 5.8%.

In terms of total asset growth, the cosmetics sector shows a significant rise from 9.8% to 12.5%, marking the highest increase compared to pharmaceuticals, which fell from 7.8% to 6.5%, and medical devices, which dropped from 11.8% to 7.4%. The Institute notes that this reflects the base effect stemming from substantial investments, share capital increases, and mergers and acquisitions from the previous year.

Profitability across the sector has generally improved. The operating profit margin for the entire biohealth sector increased from 10.1% to 10.9%, while the pre-tax net profit margin rose from 8.8% to 9.1%. Within the cosmetics industry, the operating profit margin slightly rose from 10.2% to 10.3%, and the pre-tax net profit margin improved significantly from 9.6% to 11.3%, placing it at the highest level among the three sectors. Pharmaceuticals also saw an increase in operating profit margin from 10.3% to 11.2%, with the pre-tax net profit margin increasing from 8.7% to 10.2%. Meanwhile, medical devices improved in operating profit margin from 9.0% to 11.0%, but experienced a sharp decline in pre-tax net profit margin from 7.7% to 1.7%.

On the stability front, the overall debt ratio of the biohealth industry increased from 44.4% to 47.3%, and the dependency on borrowings slightly rose from 12.4% to 12.7%, indicating an increase in debt burden. The cosmetics sector saw its debt ratio increase from 42.5% to 45.1%, but managed to lower its dependency on borrowings from 11.4% to 10.5%, demonstrating a relatively stable financial structure. Conversely, pharmaceuticals saw increases in both debt ratio and borrowing dependency, while medical devices improved on both fronts.

This analysis suggests that although growth momentum in the cosmetics industry has slightly slowed compared to the previous year, it has successfully maintained high revenue growth, achieved asset expansion, and improved profitability, indicating sustained and stable growth within the biohealth sector.