On July 21, 2021, the stock price recorded the highest point of 22,219 won, but there is an item that has been cut in half in about two years.
This event is AIPIO. According to the Korea Exchange, the closing price on the 5th was 9,050 won. The two-year loss rate is 55.24%. The securities industry believes that the stock price has declined due to fierce competition among companies due to low entry barriers in the health functional food market.However, performance has been trending upward every year. Accordingly, on the 4th, I visited the H.P.O Hannam-dong office at 270 Itaewon-ro, Yongsan-gu, Seoul. The headquarters is located in Yeongdeungpo, and there are about 10 people in charge of home shopping sales and brand curation. About 60 people work in the Hannam-dong office, including the domestic marketing division, business strategy division, and overseas strategy division. In effect, it is the headquarters of H.P.O.
“We will leap from a health functional food company to a healthy living company”I met Vice Chairman Min Taek-geun here. He started working on March 1st as a professional manager who served as CEO of Taekwang Group TRN for 6 years. This is the first media interview. Vice Chairman Min said , “H.P.O is a company established in 2012 and is gaining recognition in Korea, China, Asia and Europe based on the premium health functional food ‘Denps ’ . ” ),” he revealed his aspirations. To this end, the company is divided into health, baby and children brands, new businesses, and household goods. In particular, in the health sector, the representative brand ‘Denmark Lactobacillus Story’ is so popular that it has exceeded 13 million cumulative sales over 10 years. Actor Gong Yoo is working as an advertising model.What is the business plan for the second half of the year? “We will increase contact points with consumers by diversifying sales channels,” he said. The plan is to increase the proportion of profitable online sales (42.9% in the fourth quarter of last year → 59.4% in the second quarter) and increase the profit rate by entering distribution channels such as Olive Young and Costco in September. He also emphasized, “We are planning a third mega-hit product like the story of Danish lactic acid bacteria and true vitamins.” He added, “The management goal is to achieve steady performance by increasing the brand lineup.” We expect speedy changes in marketing and sales through organizational innovation on the 1st.
Performance of 8 subsidiaries highlighted… “Asia target, Kendo to advance into Spain”Vice Chairman Min raised his voice, saying, “We will not only stay in Korea, but also achieve results overseas.” “I opened a pop-up store in a Singapore department store last month, and the response was good,” he said. “We will actively target the Asian market.” The company expects that the performance in Singapore, which has been pioneered since last year, will bear fruit from the second half of the year. It is also known that it is considering entering the health functional food market in Spain. For this reason, Lee Hyeon-yong, the largest shareholder and chairman of the board of directors, spends most of his schedule abroad to target the global market.
“Our pride lies in our global business portfolio,” said Vice Chairman Min. HPIO has eight subsidiaries, and Hi&Gogo, which sells dairy products specialized for juniors, is gaining popularity among Chinese ‘little emperors’. It posted sales of 9 billion won in the first half. This is close to 80% of last year’s sales of 12.6 billion won.
Established subsidiary Biopharm Denmark… Cash + real estate메이저놀이터 assets KRW 73.4 billionThe performance of Biopharm, a dry food manufacturer acquired in October 2019, is also on the rise. It posted sales of 27.3 billion won in the first half, which is more than 60% of last year’s 43.6 billion won. In addition, Biopharm established a Danish corporation in the first quarter and bought a factory of 11,729㎡ (approximately 3,548 pyeong) worth 8 billion won, and plans to use it as a global base. Vice President Lasse Nagell is the head of HPIO’s Danish corporation . Having worked for Christian Hansen, the world’s No. 1 probiotics company, it is evaluated that he is leading the Danish business smoothly thanks to his rich local human network. Vice Chairman Min added, “We will review the merger of lifestyle brand Geo Infotech and popular children’s fashion brand Apricot Studio within this year to increase business synergy and work efficiency.”
HPIO’s cash and cash equivalent assets were KRW 34.1 billion on a consolidated basis in the second quarter. Real estate assets are also 39.3 billion won. It is about 40% of the market cap (187.4 billion won). The debt ratio was 12.84% last year, and it is virtually debt-free. In 2018, it bought a five-story building in Barcelona, Spain, with the purpose of selling lifestyle goods and strengthening brand promotion in places with many tourists.
Increased sales by 279% and operating profit by 73% in 3 years… 2nd Quarter ‘Highest Quarterly Performance’Performance continues to improve. It recorded sales of 196 billion won and operating profit of 17.5 billion won last year, up from 51.6 billion won in sales and 10.1 billion won in operating profit in 2019. In three years, they grew rapidly by 279.84% and 73.27%, respectively.
Sales (KRW 61.2 billion) and operating profit (KRW 8.7 billion) in the second quarter increased by 20% and 11.8% year-on-year. This is the highest performance on a quarterly basis. Park Chang-gyu, head of the Future Strategy Team, said, “The sales of subsidiaries account for about 50% of the total, and the operating margin of major subsidiaries is over 15%, so it seems that the results have been good.”
HPI recorded an operating profit of 16.1 billion won in the first half of the year, which is close to last year’s annual operating profit of 17.5 billion won.The total number of shares is 20,711,686, with Chairman Lee owning 70.11%. Treasury shares are 2.94%. Foreign ownership is 1.68%, and the distribution volume is about 25%. What efforts are you making for your shareholders? Director Seo Joo-won said, “In the first year of listing in 2021, we paid 300 won in dividends to general shareholders (based on year-end settlement per share) and 75 won to the largest shareholder.” He explained, “Chairman Lee’s intention was to make more benefits go to shareholders through differential dividends.” He continued, “Last year, we gave a stock dividend of 0.04 per share and a dividend of 80 won.” This year, he emphasized, “I will work hard to get good results with my shareholders.”An official from the securities industry said, “Lactic acid bacteria and vitamins are generating stable sales.” However, “Geo Infotech, an affiliate, sells kickboards, leaving questions about synergy with the existing business, but considering that HPI’s operating profit multiple (business value compared to profitability) last year was a little over 10 times, compared to 11 to 13 times in the same industry. It is undervalued,” he advised.