[Click eStock] "Kkumbi, Steadily Improving"

Kiwoom Securities analyzed on the 20th that Kkumbee is steadily improving.

Kim Hak-jun, a researcher at Kiwoom Securities, stated in a report on the day, “Kkumbee recorded cumulative sales of 29.6 billion KRW through the third quarter of this year, growing 42% compared to the same period last year, and reduced its operating loss significantly to 10 million KRW. This is the result of increased sales of existing core products and expanded new product launches driving sales growth despite the challenging domestic market environment,” he evaluated.

Looking at each segment, sales in the infant furniture (mats, etc.) segment increased by 14% year-on-year, while the pet product category recorded an explosive growth of 371%. Additionally, sales in the coffee distribution and home appliances segment increased by 58%, mainly due to strong sales of G7 coffee and price increases following the rise in coffee bean prices. In particular, the home appliances segment, including the newly launched baby bottle sterilizer this year, is estimated to have contributed about 36% of the overall performance growth.

Kkumbee is expected to achieve sales of 39.1 billion KRW in 2024 (a 35% increase from the previous year) and an operating loss of 300 million KRW (reduced loss). Researcher Kim said, “Although selling and administrative expenses are expected to continue rising due to increased R&D and logistics and sales costs, the ratio of selling and administrative expenses is expected to decrease from 36.3% in 2023 to 31.5% in 2024 thanks to sales growth,” adding, “This will reduce the operating loss by about 2.3 billion KRW compared to the previous year.”

Kkumbee is projected to achieve sales of 45.8 billion KRW in 2025 (a 17% increase from the previous year) and an operating profit of 4.2 billion KRW (OPM 9%), marking a turnaround to profitability. The main growth factors are expected to be expanded overseas market entry and cost efficiency.

Currently, 97% of Kkumbee’s sales occur domestically, and its main export market is limited to Japan, but it plans to expand its export countries to Singapore, Malaysia, Vietnam, and others starting next year. He said, “We are already supplying samples and conducting sales activities with local buyers in Singapore and Malaysia, and have signed an MOU with ‘Kkonkkung,’ the largest infant product distributor in Vietnam, showing tangible results,” and forecasted, “Accordingly, overseas sales expansion will accelerate from 2024.”

Furthermore, he noted, “R&D expenses, which increased over the past two years to diversify product categories, are expected to stabilize in 2024,” and predicted, “As the company enters the stage of recovering costs invested through new product sales expansion, logistics costs and sales commissions will also be reduced.”