[Masked Listed Company] Aurora's Second Successor Training Is in the Mask Business

No Hee-yeol, Chairman of Aurora World

[Asia Economy Reporter Jang Hyowon] Character design toy company Aurora World has started manufacturing and selling masks as a new business. The mask business is overseen by CEO No Jaeyeon, the son of Aurora World’s founder, Chairman No Heeyeol.

In the past, CEO No had experience promoting Aurora World’s new game business. However, the game business segment recorded losses of several hundred million won and was absorbed and merged into Aurora World. As a result, the market is focusing on whether CEO No can make the most of this second opportunity.

Estimated Investment of Over 10 Billion Won in Mask Business

Aurora World announced in October last year that it would enter the mask business, anticipating the prolonged COVID-19 situation. This was during a period when mask production surged compared to early last year, causing wholesale prices to fall. It is known to have secured a mask manufacturing cleanroom facility with about 50 production lines on a 7,000-pyeong site in Icheon, Gyeonggi Province.

Calculating 200 million won per mask manufacturing machine, the equipment alone amounts to about 10 billion won. Including the land and cleanroom facilities, it is estimated that Aurora World invested between 15 billion and 20 billion won.

Aurora World is a character design specialist company that commercializes character toys and conducts brand marketing in domestic and international markets as a global multinational company. It owns famous character content such as the 3D animation ‘Yuhoo and Friends’.

Aurora World has set a strategy to export masks through channels such as online distribution, pharmacies, discount stores, and large supermarkets established by its sales subsidiaries in the United States, the United Kingdom, Germany, and Hong Kong. It plans to leverage the strength that 85% of its sales are exports to target the mask business as well.

To this end, it also established ‘Smile Bio,’ a specialized mask sales corporation. Aurora World produces the masks, and Smile Bio handles sales. Smile Bio has expanded the mask market base by signing memorandums of understanding (MOUs) with other mask manufacturers, including Ace Biomed.

Aurora World’s first mask products were fashion and kids masks. Its in-house design research center developed trendy fashion masks and commercialized them. KF94-grade masks were launched for the first time this month. Since KF94 requires certification from the Ministry of Food and Drug Safety (MFDS), it took some time.

An Aurora World official said, “There are various mask companies domestically, but our strength lies in building a global sales network,” adding, “We recently completed registration with the U.S. Food and Drug Administration (FDA) and are preparing for European CE FFP2 certification, and we will strive to expand exports.”

Losses of Several Hundred Million Won in Past Game Business... Will Masks Be Different?

The market views Aurora World’s mask business as part of the successor training. On the 27th of last month, Aurora World appointed No Jaeyeon as the new CEO. The existing CEO Hong Giseon system changed to a dual CEO system with Hong Giseon and No Jaeyeon. The newly appointed CEO No Jaeyeon is the son of Aurora World Chairman No Heeyeol.

At 37 years old, CEO No Jaeyeon first became an internal director of Aurora World in 2014. Currently, he is in charge of content, mask, and bio-business divisions at Aurora World. He leads the new businesses that are the future growth engines of Aurora World.

This is not CEO No’s first time promoting new businesses. In 2009, Aurora World established ‘Aurora Games’ and entered the online game business. Aurora World initially invested 800 million won to establish Aurora Games and invested about 6 billion won by 2014. In addition to capital investment, it provided several loans. The cumulative loans over five years reached about 2.3 billion won.

CEO No served as an internal director of Aurora Games from 2011. In 2013, he personally founded a company called ‘Nextab Games’ and developed an MMORPG game called ‘Hench’ using the intellectual property (IP) of ‘Mixmaster’ owned by Aurora Games.

However, Aurora Games recorded operating losses of 1.5 billion won in 2013 alone and posted losses of several hundred million won annually. Eventually, Aurora Games was pushed to a capital erosion rate of 83% and was absorbed and merged into Aurora World in 2014. Nextab Games also went through closure procedures. Aurora World withdrew completely from the game business without recovering its investment principal.

An Aurora World official stated, “We tried to enter the online game business at the time, but it did not go well,” and added, “There is no connection between Aurora Games and CEO No Jaeyeon.”