**Reversal at APR… Intense Pursuit by Gudai**
**Restructuring the Year-End Top 4… Focus on Synergy with Taekwang**
[Herald Economy = Reporter Kang Seung-yeon] With Aekyung Industrial now under the new ownership of Taekwang Industrial, there is growing interest in whether the company can dispel uncertainties related to the sale and regain its reputation as one of the ‘Big 3’ in the cosmetics industry.
According to industry sources on the 8th, a consortium made up of Taekwang Industrial, T2PE, and Yuanta Investment has been selected as the preferred bidder to acquire management rights to Aekyung Industrial. The sale involves approximately 63% of the management rights owned by AK Holdings and other entities in the Aekyung Group. The acquisition price is reportedly in the high 400 billion won range.
Aekyung Industrial operates cosmetics brands such as Luna and Age 20’s, and household brands like Kerasys and 2080. It has long formed a ‘Big 3’ framework with LG Household & Health Care and AmorePacific in the cosmetics market. However, it is currently being threatened by the emergence of new powerhouses such as APR and Gudai Global.
In the first half of the year, Aekyung Industrial’s cosmetics division sales fell to 108.5 billion won, a 20.3% decrease compared to the same period last year. Exports were hit hard, shrinking by 33.5% to 60.8 billion won. Total sales stood at 322.4 billion won and operating profit at 17.2 billion won, down 5.9% and 49.3% respectively year-over-year.
While Aekyung Industrial has been faltering, new brands leading the K-beauty front have been advancing rapidly. APR, which operates Mediheal, reported first-half cosmetics sales of 392.1 billion won. Including their beauty device brand Mediheal Agel, sales reached 573 billion won. APR is accelerating its expansion into overseas markets such as the U.S. and Japan.
Gudai Global’s growth is also noteworthy. By acquiring the likes of Josunmi Empire, Tirtir, and Skin1004, which first gained attention overseas, they have expanded significantly. Once they complete the acquisitions of Serin Company, which operates Round Lab, and Skin Food, their annual sales are expected to increase more than fivefold from last year’s 330.9 billion won to around 1.7 trillion won.
This could lead to a restructuring of the domestic cosmetics market into a top-four framework. According to this year’s annual sales consensus (average forecasts from securities companies) compiled by FnGuide, LG Household & Health Care is projected at 6.5595 trillion won, AmorePacific at 4.2978 trillion won, and APR at 1.3599 trillion won. Aekyung Industrial’s estimate falls short of 1 trillion won, at 661.7 billion won.
For Taekwang Industrial, reinforcing Aekyung Industrial’s position is a top priority. Eyeing the growth potential of the K-beauty market, Taekwang Industrial has identified this as a new business venture. With Taekwang Group holding Shopping NT, a data home shopping channel, immediate synergies are possible. Last July, Taekwang Group announced plans to invest 1.5 trillion won by next year in new businesses including cosmetics, energy, and real estate.
An industry insider commented, “Aekyung Industrial has been struggling in cosmetics recently, but it maintains a solid market position in the household goods sector. Given Taekwang’s strong commitment to new business development, they could cultivate the cosmetics business as a new growth driver through additional M&A activities.”