KOSDAQ-listed company Hengsheng Group announced on the 9th that it will proceed with a third-party allotment paid-in capital increase to strengthen the second-generation owner’s management foundation and expand its cosmetics business.
The day before, Hengsheng Group announced that it would conduct a third-party allotment paid-in capital increase worth 6 billion KRW targeting Hui Hongyuan, the second-largest shareholder and director, and Hong Kong-based investors. The new shares will be issued at a price of 250 KRW, representing a 9.8% premium over the reference stock price. Upon completion of this capital increase payment, the largest shareholder is expected to change from the current CEO Hui Mankit to the second-generation manager, Director Hui Hongyuan.
Director Hui Hongyuan initially secured an 11.16% stake in the company last June through participation in a third-party allotment paid-in capital increase. After this capital increase is completed, his shareholding will expand to 16.45%. Including the stake of his father, CEO Hui Mankit, the combined largest shareholder and related parties’ shareholding will amount to 26.51%.
A company official stated, "Director Hui Hongyuan decided to participate in this capital increase at a premium price compared to the reference stock price based on his commitment to responsible management as a second-generation leader and confidence in increasing corporate value."
With the strengthening of Director Hui Hongyuan’s control, the company will embark on full-scale second-generation management and new business expansion. Last year, Hui Hongyuan decided to enter the cosmetics business as a new growth engine for the company and has been actively supporting business expansion. Part of the funds secured this time will also be used to enhance competitiveness in the cosmetics business.
Director Hui Hongyuan said, "We are continuing efforts to strengthen responsible management and business foundations not only in China but also in Korea, including expanding control, entering the cosmetics business, and acquiring Korean intellectual property (IP) and content company Platform934. We will strive to create synergies in cosmetics, IP business, and more by leveraging the networks and competitiveness we have built over a long period in the Chinese toy market."
Meanwhile, Hengsheng Group announced on the 3rd through a disclosure titled ‘Sales or Profit Structure Change of 30% or More’ that its consolidated sales last year reached 619.1 million yuan (approximately 117.1 billion KRW), and operating profit was 39.29 million yuan (approximately 7.4 billion KRW), achieving a significant performance improvement. This was due to strong sales of high-margin premium toys and the impact of entering the cosmetics business.
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