Sonokong Secures Momentum for Performance Turnaround... "Profitability Expected Within the Year"

Sonokong, a company specializing in toys and game content, announced that it has secured a clear momentum for a performance rebound by acquiring a 90% stake in Klasse Auto, the largest official Volkswagen dealer in Korea, on May 30.

Through this acquisition, Sonokong will begin reflecting Klasse Auto's sales as consolidated revenue starting from the second quarter of this year. Klasse Auto has maintained stable performance, recording sales of 153 billion KRW in 2022, 117.5 billion KRW in 2023, and 104.7 billion KRW in 2024. The company is expected to see a rebound in performance, driven by the launch of the Atlas, which directly competes with Hyundai's Palisade, the introduction of the ID5 electric vehicle model, and the recent acquisition of dealership rights in the Busan area.

Meanwhile, Sonokong has experienced sluggish performance over the past few years. Its consolidated sales, which stood at 66.7 billion KRW in 2022, dropped by more than half to 32 billion KRW last year, resulting in continued weakness in its stock price. In this context, the acquisition of Klasse Auto is expected to serve as a clear momentum for Sonokong's performance improvement.

In addition, Sonokong is maintaining a positive trend in its core business of game and toy distribution. As one of the domestic distribution partners for Nintendo's next-generation console, Switch 2, the company is also expected to achieve a turnaround in performance driven by strong pre-order sales of Switch 2.

As a result, there is growing anticipation over whether Sonokong can secure both the stability of its existing business and the growth potential of its new business, and achieve not only a clear expansion in sales within the year but also a turnaround to profitability.

Separately, on May 30, Sonokong disclosed major management changes, including a share purchase agreement that will result in a change of the largest shareholder, a paid-in capital increase, the issuance of convertible bonds, and the appointment of a management supervisor. Upon completion of the paid-in capital increase on June 18, the largest shareholder is expected to change from H2 Partners and one other party to HK Mobility Company. On the same day, the company also announced the acquisition of Klasse Auto, the official Volkswagen dealer.