Aekyung pursues IPO in bid to expand abroadAekyung Industrial, the Korean household goods giant, will go public on the Kospi this month to raise capital for new products and expansion into foreign markets.
The company said in a news conference Tuesday that it plans to list on March 22. Aekyung - founded in 1985 and best known for its 2080 toothpaste, Kerasys shampoo and Trio dishwashing soap - ranks second in the local household goods market with a 20.7 percent share after LG Household & Health Care’s 35.2 percent.
Until the third quarter last year, Aekyung made 440.5 billion won ($409.7 million) in sales and net profit of 32.9 billion won, a 21 percent increase from 2016. Behind this growth was the expansion of its cosmetics business, which rose to account for 36 percent of the company’s sales last year, up from 14.3 percent in 2015.
The most recent cash cow has been its cosmetics line AGE 20’s. The brand’s Essence foundation raked in 139 billion won from home shopping channels alone last year. It initially targeted women in their 30s and 40s, but word of mouth made it a best-seller among younger consumers as well.
“The sales ratio of daily necessities to cosmetics is six to four at the moment, but we’re expecting these figures to reverse by 2020,” Aekyung CEO Lee Yun-kyu said at the news conference Tuesday.
The company plans to use funds from the initial public offering to develop new brands and expand sales overseas. In September, it opened an office in Shanghai and recently placed products on Amazon to tackle the U.S. market. The initial offering price will be decided by a demand forecast to take place Wednesday and Thursday.
One factor that may have a negative effect on Aekyung’s offering is its involvement in the humidifier sterilizer scandal. The company was one of several in Korea that sold sterilizers containing toxic chemicals.
Last month, the Fair Trade Commission fined Aekyung 88 million won for advertising the products as safe despite knowing its components were potentially dangerous.
BY SONG KYOUNG-SON [firstname.lastname@example.org]
with the Korea JoongAng Daily
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