Hengsheng Group's Q3 Performance Takes Off... Expectations for Growth in New Cosmetics Business

KOSDAQ-listed company Hengsheng Group recently announced on the 2nd that its new cosmetics business has achieved results beyond expectations, and along with the steady progress of its existing businesses, both sales and profits saw significant growth in the third quarter.

Hengsheng Group's cumulative sales for the third quarter increased by 19.69% year-on-year to 520 million yuan (approximately 97.8 billion KRW), and operating profit soared by 15,287.79% to 35.19 million yuan (approximately 6.6 billion KRW). With a significant reduction in selling and administrative expenses compared to the previous year, the operating profit margin improved from 3.97% last year to 6.75%, an increase of 2.78 percentage points. Net profit for the period reached 28.08 million yuan (approximately 5.3 billion KRW), marking a successful turnaround to profitability.

The new cosmetics business, since its launch, recorded sales of about 4.1 billion KRW during the July to September period this year, achieving valuable results. The sales proportion accounted for 10.41% of the consolidated sales during the same period. Considering the future business expansion trend, the sales proportion is expected to grow further, raising expectations for the business going forward.

Hengsheng Group started its new cosmetics business in July through its wholly-owned domestic subsidiary, HS Beauty. Hengsheng Group currently distributes 17 domestic brands in its cosmetics business. Most of the products are skincare items, with some consisting of color cosmetics. The company plans to expand the business by securing various brands and sales channels in the future, and beyond simple distribution, it aims to acquire exclusive distribution rights to brands to further grow the business.

The existing businesses are also progressing smoothly. Plastic toys increased by 45.5% thanks to rising domestic sales, and stuffed toys grew by 16.3% year-on-year driven by increased exports.

According to a company official, “Since the new cosmetics business has rapidly gained momentum, we expect it to become a key business unit in the near future,” and added, “We will actively devote our capabilities to discovering other new businesses to strengthen the momentum of new business contributions to overall performance.”