#South Korea #Seoul #Coway #BEREX #Corporate Value-Up Plan

Coway's Corporate Value-Up Plan: Aiming for Revenue Growth

In a bold move, Coway Co., Ltd., known as the "Best Life Solution Company," has unveiled its Corporate Value-Up Plan, which aims to significantly boost its shareholder value and set a target to reach an impressive revenue of over 5 trillion KRW by 2027. This ambitious goal is underpinned by strategic growth initiatives and a commitment to enhancing financial stability, ensuring that Coway establishes itself as a leader in sustainable business practices.

Objectives of the Corporate Value-Up Plan

Coway's plan outlines four crucial indicators aimed at elevating sustainable shareholder value: continuous growth, improved shareholder returns, a robust capital structure, and enhanced corporate governance. These indicators serve as a guiding framework for the company’s approach moving forward.

Revenue Target of Over 5 Trillion KRW

Central to Coway's strategy is the aspiration to achieve a Compound Annual Growth Rate (CAGR) of 6.5% from 2025 to 2027. This growth will primarily be fueled by expanding its core business operations, entering new markets through the establishment of local subsidiaries, and developing innovative brands. Coway is particularly focused on enhancing its global outreach by implementing tailored marketing strategies designed to drive brand awareness on an international scale.

To accomplish these objectives, Coway plans to introduce localized products and services aimed at solidifying its competitive stance in the global marketplace. Additionally, the company intends to enhance its product line-up and improve customer experiences through its dedicated wellness and sleep brand, BEREX. With an ambition to expand its offline offerings, Coway aims to strengthen its brand recognition through targeted marketing campaigns within South Korea.

Expanding into the Elder Care Sector

Another notable aspect of Coway’s plan includes its exploration of the elder care sector. By establishing a new subsidiary named Coway Life Solutions in October 2024, Coway is dedicated to introducing next-generation elder care services in the first half of 2025, aiming to tap into this burgeoning market for sustainable growth. The company is also pursuing strategic partnerships and technological collaborations to foster further business opportunities.

Improving Shareholder Returns

In alignment with its revenue growth objectives, Coway has set impressive targets for its shareholder returns. The company intends to increase its Total Shareholder Return (TSR) from the current 20% to 40% of consolidated net income. This remarkable uplift will be achieved through a balanced approach that encompasses cash dividends and share buybacks.

Specifically, for the fiscal year 2024, Coway plans to allocate 33% of its revenue to cash dividends and 7% to share buybacks. The commitment to maintaining a remarkable 40% TSR will see ongoing adjustments between cash dividends and share buybacks from FY2025 to FY2027, reflecting Coway's dedication to maximizing shareholder value.

Financial Stability and Capital Structure

Financial stability remains a key pillar of Coway’s overall strategy. The company is targeting a net debt to EBIT ratio of no more than 2.5, a prudent measure that ensures financial leverage is maintained at a manageable level relative to performance indicators.

This conservative financial strategy is not only designed to protect Coway’s financial health but also aims to enhance timing regarding shareholder returns in relation to investment results.

Strengthening Corporate Governance

In addition to financial targets, Coway is committed to improving its corporate governance standards. The aim is to improve its governance score significantly from 53% in 2024 to 87% by 2026, which is well above the market average of 49.5% recorded in 2023. Enhancements will focus on increasing board independence and diversity, with an emphasis on bringing diverse expertise into the boardroom. Since 2023, Coway has standardized board independence guidelines and intends to augment the number and percentage of external directors in the future.

CEO Jangwon Seo stated, “Coway's Corporate Value-Up Plan lays the groundwork for sustainable growth that benefits both the company and its shareholders. We are focused on shareholder-friendly management and will implement a variety of strategies to enhance corporate value and ensure long-term growth.”

In summary, Coway’s comprehensive approach towards strengthening its business through the Corporate Value-Up Plan demonstrates its commitment to sustainable development, enhanced shareholder returns, and improved corporate governance practices, setting a solid foundation for future success.