Cash Dividends and Share Repurchases and Cancellations to Be Carried Out at a Total Shareholder Return Ratio of 40% Over Three Years
Coway is set to actively launch its 'Value-Up Program' aimed at enhancing sustainable shareholder value. Following the announcement on the 6th of last month to more than double the total shareholder return ratio from the existing 20% to 40%, Coway has now unveiled additional plans to increase corporate value.
On the 13th, Coway held a board meeting and selected ▲sustainable growth ▲improvement of shareholder returns ▲appropriate capital structure ▲advancement of governance as key indicators for enhancing sustainable shareholder value. Based on these, the company established and disclosed a corporate value enhancement plan.
Achieving Over 5 Trillion KRW in Sales by 2027 Through Revenue Growth
First, Coway set a goal to achieve a compound annual growth rate (CAGR) of 6.5% in sales from this year through 2027, surpassing 5 trillion KRW in sales by 2027. To achieve this, the company plans to reach its sales targets through core business advancement, overseas business expansion, and strengthening of new brands and new businesses.
For overseas business expansion, Coway will identify new countries for entry and promote the establishment of subsidiaries, while strengthening global brand awareness through country-specific tailored marketing strategies. Additionally, as part of its global localization strategy, the company plans to develop services and products that reflect cultural differences to enhance market competitiveness.
In the new brand sector, Coway plans to expand the product lineup and develop new products to grow the ‘BEREX’ brand, and expand offline channels to strengthen customer experience marketing. Marketing efforts will also be intensified to raise awareness of the new brand.
In the new business sector, Coway is pushing into the domestic silver care field and will explore various new business opportunities for sustainable growth. The company established ‘Coway Life Solution’ in October last year to promote next-generation silver life solution businesses and plans to officially launch services in the first half of this year. Furthermore, Coway will actively consider technological cooperation and strategic partnerships to expand new business areas.
Core business advancement will also continue. Coway plans to strengthen market competitiveness through new product development for core product groups and maintain continuous investment in strengthening core competencies such as research and development (R&D), IT, marketing, and services. Based on digital advancement, the company will also enhance channel competitiveness and operational efficiency.
Shareholder Return Ratio Significantly Raised from 20% to 40%
Regarding shareholder returns, Coway explained that it will implement policies focusing on balanced distribution between current shareholder returns and future growth to capture the three key factors of ‘sustainability of shareholder returns,’ ‘corporate growth,’ and ‘financial soundness.’
Coway plans to more than double the total shareholder return ratio from the existing 20% of consolidated net income to 40%, including cash dividends and share repurchases and cancellations. From 2025 to 2027, the company will maintain a total shareholder return ratio of around 40%, while determining the proportion of cash dividends and share repurchases and cancellations based on total shareholder yield.
New target capital structure for securing financial soundness has also been established. Coway plans to utilize appropriate financial leverage considering repayment capacity based on operating performance and to accelerate the timing of shareholder returns on investment results. Accordingly, Coway will manage net debt to operating profit at a maximum of 2.5 times, maintaining financial burden at a manageable level.
Strengthening Board Independence and Diversity to Advance Governance
Coway is also accelerating governance advancement. The compliance rate with key governance indicators is planned to increase from about 53% last year to 87% by 2026. As of 2023, the market average achievement rate for key governance indicators is 49.5%. In particular, Coway plans to focus on improving shareholder-related key indicators.
Additionally, Coway will strengthen the independence of board members and secure diversity. Since 2023, Coway has established board independence guidelines to ensure independence, and going forward, it plans to expand the number and proportion of outside directors and recruit individuals with diverse capabilities to realize advanced governance.
A Coway representative said, “We expect this Value-Up Program to provide a solid foundation for the company and shareholders to grow together,” adding, “We will continue to strengthen shareholder-friendly management and achieve sustainable growth based on various strategies to enhance corporate value.”
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