Coway's shares surged over 10% in early trading following the announcement of record earnings for the first quarter.
As of 9:12 a.m. on May 11, Coway's stock was trading at 97,100 won, up 9,500 won (10.84%) from the previous trading day. The company has seen a three-day streak of gains, with increases of 4.45% and 0.81% on May 7 and 8, respectively.
Analysts attribute the stock's rise to strong earnings and expectations for stable cash flow-based shareholder returns. Coway reported on May 8 that its consolidated revenue for the first quarter reached 1.33 trillion won, a 13.2% increase from the same period last year. Operating profit rose by 18.8% to 250.9 billion won, while net profit increased by 31.1% to 182 billion won, marking the highest quarterly performance in the company's history.
The growth of Coway's domestic business was particularly notable. Domestic revenue reached 742.8 billion won, up 9.5% year-on-year, with rental revenue increasing by 10.5% to 715.3 billion won. The net increase in domestic rental accounts was 188,000, an 81.8% rise compared to the previous year, driven by expanded new rental sales and strong performance in key product categories like Birex.
Internationally, Coway's business also showed growth across all regions. The Malaysian subsidiary saw a 23.5% increase in revenue year-on-year, benefiting from strong sales of existing products and the successful introduction of new categories, which also improved operating profit margins. Although revenue for the U.S. subsidiary slightly decreased due to a high base effect, operating profit surged by 70.7% due to cost efficiencies. Thailand recorded a remarkable 29% growth in revenue.
Market analysts believe that the combination of earnings growth and expanded shareholder returns is likely to lead to a reassessment of the company's value. Cho Sang-hoon, a researcher at Shinhan Investment Corp., noted, "It is important to focus on the business model that generates stable cash flow, the high proportion of overseas sales, and the attractive valuation. The increase in the major shareholder's stake and the introduction of quarterly dividends are also factors supporting the stock price. He added, "The strong performance is part of a virtuous cycle leading to an active shareholder return policy, targeting a total shareholder return rate of 40% from 2025 to 2027."
* This article has been translated by AI.
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