CKH Turns Profitable Through Revenue Structure Improvement... "Expecting Future Sales Growth"

[Asia Economy Reporter Yoo Hyun-seok] CKH, a June fiscal year-end corporation, announced on the 30th that it succeeded in turning a profit through improvements in its revenue and cost structure despite the adverse effects of COVID-19.

CKH recorded an operating profit and net profit of 5.18 million yuan (approximately 900 million KRW) and 6.44 million yuan (approximately 1.1 billion KRW), respectively, in the first quarter of this year (July to September 2020), turning profitable compared to the same period last year.

The company explained that it succeeded in turning a profit through improvements in cost structures such as cost of goods sold and selling and administrative expenses. Cost of goods sold decreased by 27% compared to the same period last year, and selling and administrative expenses were reduced by 78%, contributing to the turnaround. Meanwhile, sales decreased by 1.7%, maintaining the same level as the previous year.

Looking at CKH’s sales by business division, the health supplement division increased by 22% compared to the same period last year due to strong sales of its main brand, "Youngsaenghwalryeok." The general food division also increased by 15% due to the recovery of traditional tea sales.

Although the raw material distribution division showed a sluggish performance compared to the same period last year, the company noted that new sales from the recently acquired Pu'er tea plantation have begun to be reflected. Since Pu'er tea sold from this plantation is highly profitable, profitability is expected to improve as sales expand in the future.

A company official stated, “Although the company’s stock price had been sluggish for a long time due to continuous operating losses, we will do our best to restore corporate value by achieving simultaneous growth in sales and profits going forward.”

Meanwhile, CKH is promoting the cosmetics business as a new business to expand its operations and also plans to sell new health supplement products.