Aekyung Industry Co., a South Korean household and personal care product maker whose name and bottom line had been damaged for distributing toxic humidifier sterilizers that caused multiple deaths, plans to debut on the country’s primary Kospi market on this month with hopes to raise up to 231.9 billion won ($215.7 million).
At a press conference on Tuesday, Aekyung Industry unveiled its initial public offering (IPO) price band of between 29,100 won and 34,100 won per share for proceeds of up to 231.9 billion won based on the top end price. Its market capitalization after the IPO is likely to reach 890 billion won.
Aekyung Industry was founded in 1954 as Aekyung Oil Industry Co. that makes soaps and detergents. The household care division spun off from the mother company in April, 1985, and was established as a separate entity.
Popular brands under Aekyung Industry are Trio, Korea’s first and longest surviving dishwashing detergent, and Dental Clinic 2080 toothpaste. In recent years, the company has also been expanding its cosmetics business. There has been particularly growing consumer demand for Aekyung Industry’s AGE 20’s essence compact, which has raised 130 billion won or more in sales last year from home shopping.
Aekyung Industry’s cosmetics business accounts for 36 percent of its total accumulated sales as of the third quarter last year, up from 14.3 percent in 2015 and 25.9 percent in 2016. The company expects its cosmetics business to grow as it seeks to find retail channels in Japan and Southeast Asia, in addition to sales channels already secured in China, Russia, and the United States.
Aekyung Industry raised a cumulative net income of 32.9 billion won in the January September period, up 21 percent from a year ago, thanks to increased profit from booming cosmetics business, the company said. Sales also reached 440.5 billion won in the same period.
Industry analysts, however, noted that the scandal involving Aekyung Industry’s humidifier sanitizers with toxic chemical materials could be an issue affecting its value assessment ahead of the IPO. The company said that health risks have not been confirmed yet of CMIT/MIT, the main component contained in its Humidifier Mate that has been sold, and that related test is still ongoing. If confirmed to pose risk, however, it is highly likely that the company will lose a lawsuit and will have to pay huge amounts in compensation.
By Shin Heon-cheol and Lee Eun-joo
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