45% Increase Compared to 2022... Operating Profit Slightly Decreased
Expectations for IPO to Accelerate in May-June This Year
The franchise company The Born Korea, operated by CEO Baek Jong-won, recorded its highest-ever sales last year. Based on this strong performance, there are expectations that the initial public offering (IPO) will be actively pursued.
According to the business report submitted by The Born Korea to the Financial Supervisory Service on the 16th, the consolidated sales of The Born Korea and its major subsidiaries reached 410.6 billion KRW, with an operating profit of 25.5 billion KRW last year. The Born Korea's sales have shown an upward trend since 2020. Sales increased from 150.7 billion KRW in 2020 to 194.1 billion KRW in 2021, and then to 282.1 billion KRW in 2022. In 2023, sales grew by about 45%, nearly doubling to the 400 billion KRW range. As franchising is the main business, stable store openings last year are considered the cause of the sales increase. However, operating profit slightly decreased from 25.7 billion KRW in 2022. Individually, The Born Korea recorded sales of 388 billion KRW and operating profit of 23.9 billion KRW last year, marking increases of 47.4% in sales and 2.5% in operating profit compared to the previous year.
Based on this strong performance, The Born Korea's IPO is expected to accelerate in the first half of this year. The Born Korea selected Korea Investment & Securities and NH Investment & Securities as joint lead managers for its IPO in 2018 but postponed the listing due to the overall difficulties faced by the dining industry amid the COVID-19 pandemic in 2020. However, The Born Korea conducted a stock dividend in January, issuing two shares per existing share. This procedure, typically done to increase the number of shares available for trading, was interpreted as a preparatory step for the IPO. Additionally, CEO Baek stated in a 2022 media interview that "the company will go public in 2024, marking its 30th anniversary."
The Born Korea operates 25 franchise brands including Hanshin Pocha, Saemaeul Sikdang, Paik’s Coffee, Yeokjeon Udon, Hong Kong Banjeom 0410, and Richun Market, as well as the Jeju The Born Hotel. CEO Baek holds the largest stake with 76.69%. The second-largest shareholder is Vice President Kang Seok-won, who owns 21.09% of the company.
However, franchise companies such as Kyochon F&B (Kyochon Chicken) and MP Daesan (Mr. Pizza) experienced poor stock price performance immediately after their IPOs. When Kyochon F&B entered the KOSPI market in November 2020, its IPO price was 12,300 KRW, but it closed at 7,860 KRW on the 15th. Mom’s Touch also listed on the KOSDAQ in 2015 but chose to voluntarily delist after six years. Due to these precedents, there is keen interest in whether The Born Korea will navigate smoothly after its listing.
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