Hengsheng Group "Expecting Growth with Expansion of Premium Toy Exports"

KOSDAQ-listed company Hengsung Group announced on the 27th that it recently signed a contract to expand the supply scale with ThreeSixty Sourcing, a subsidiary of the global retailer ThreeSixty Group.

The expansion of the supply scale is mainly aimed at increasing the supply of products from the premium toy brand F.A.O Schwarz. As the supply of premium brand products is scheduled to expand, simultaneous growth in sales and profits is also expected. The company stated that the supply scale this year is expected to increase by 30-40% compared to last year. Hengsung Group supplies according to ThreeSixty Sourcing’s irregular orders, and last year’s supply scale reached approximately 10 million USD (about 13.9 billion KRW).

This supply expansion covers 16 items including plush toys and robot toys from F.A.O Schwarz and other brands. Since these are composed of premium products, the average gross profit margin of the products is about 30%, which is twice the 15.2% gross profit margin of last year’s sales. The future expansion of the supply scale is expected to lead to improved profitability, raising expectations for performance growth this year.

ThreeSixty Sourcing supplies the products received from Hengsung Group to large retailers such as Walmart, Tesco, and Costco. Having a long-standing relationship with Hengsung Group, ThreeSixty Sourcing recently visited Hengsung Group to request an expansion of the supply scale due to increased toy demand in the U.S. market for this contract signing.

Hengsung Group also stated that it plans to enter the European market as well. Currently, it is in discussions with local European distributors and plans to establish a local liaison office in the future. The aim is to secure performance growth through the expansion of overseas sales channels.

A representative of Hengsung Group said, “Although recent performance in the toy business has been sluggish, we will improve our structure by increasing the proportion of premium products through expanding exports and the share of intelligent toy products.”