Erkos Shares Rise After Presidential Election... Expectations for Low Birthrate Measures

89% Stock Surge After Presidential Election
Business Strategies Responding to Low Birth Rates and Aging Population
Concerns Over Increased Volatility Due to Short-term Spike

Since the presidential election on June 3, the share price of food tech company Erkos has shown a steady upward trend over the past month.

According to the financial investment industry on July 7, Erkos shares rose by 89.3% compared to June 2. During the same period, the KOSDAQ index increased by 4.8%.

As the government decided to introduce practical measures to address the issue of population decline, Erkos, a company specializing in infant and toddler food production, has come under the spotlight.

According to the "2025 Population Report" released by the Korea Future Population Research Institute, if the trend of low birth rates and an aging population continues, the domestic population is expected to decrease to 7.53 million by 2125. This figure is based on the most pessimistic low scenario. The government has recognized the population cliff issue as a crisis threatening national survival and has decided to further strengthen the authority of the Presidential Committee on Low Fertility and Aging Society, which has stimulated investment sentiment. To address the problems of low birth rates and an aging society, more than 88 trillion won has been allocated to the budget just for this year.

Erkos is a food tech company that provides "whole family food solutions." In response to market changes and sustainability demands arising from low birth rates and an aging population, the company is expanding its business into alternative foods and elderly-friendly food sectors. Through a merger with Kiwoom No.6 SPAC via a SPAC extinction method, Erkos was listed on the KOSDAQ market on February 28. Its flagship brand, "Lusol," includes over 160 types of baby food, nutritional porridge for the elderly, baked goods made with healthy ingredients, and health functional foods. Lusol, which started as a specialized brand for infant food, directly produces stage-specific baby foods, side dishes for toddlers, and rice snacks tailored to infants' ages. The company has also entered overseas markets, exporting to China, Hong Kong, Taiwan, Vietnam, Singapore, and Myanmar, and is establishing its presence abroad as well.

In the first quarter of this year, Erkos recorded sales of 8.163 billion won and an operating profit of 400 million won. Compared to the same period last year, sales decreased by 11% and operating profit dropped by 68%. Park Sangjun, a researcher at Kiwoom Securities, analyzed, "The poor performance in the first quarter was due to a slowdown in domestic consumer sentiment caused by political uncertainty, as well as intensified competition resulting from low-price promotions by competitors." He added, "From the second half of this year, partial recovery in profitability is possible, driven by an improvement in domestic consumer sentiment, expansion of new external distribution channels, and increased sales of elderly-friendly foods."

An official from the financial investment industry advised, "Since the stock has surged in a short period as a theme stock, volatility may increase. It will be necessary to monitor whether performance improves in the second half of the year."