K-beauty corporations that are growing quickly in overseas markets are expanding efforts to share the fruits of strong earnings with shareholders. In addition to increasing dividends and canceling treasury shares, a new approach has emerged that offers product discounts through shareholder-only online malls. The trend is seen as driven by stronger cash generation from global expansion and rising demands from investors and the government for shareholder returns. Corporations' aggressive expansion of shareholder returns is also showing up as a real boost to share prices.
According to the industry on the 5th, d'Alba Global(483650) recently opened a web-based shareholder benefit mall where shareholders can buy its cosmetics at discounted prices. The previous service was available only through the mobile trading systems (MTS) of four partner securities firms, but the new mall is designed to allow sign-ups on PCs and mobile devices regardless of brokerage. The number of discounted products also increased from five to 10.
The shareholder mall offers benefits in three tiers—first, royal, and signature—based on the number of shares held and the holding period. Each tier has a different base discount rate and a monthly additional discount limit, and if shares are held for 181 days or longer, the discount limit is expanded. The longer the shares are held, the greater the benefits, encouraging both long-term investment and repeat purchases.
d'Alba Global is also expanding financial shareholder returns. The company said it plans to cancel 63,364 of the 83,364 treasury shares secured through a treasury share acquisition trust, excluding 20,000 shares reserved for employee stock compensation, within the year. It also plans to maintain shareholder returns, including dividends and treasury share purchases and cancellations, at 25% or more from this year through 2028.
APR(278470) also decided last month on an interim dividend of 2,500 won per common share, totaling 93.6 billion won. Since its 2024 listing, cumulative shareholder returns combining treasury share purchases and cancellations and cash dividends have reached 400 billion won. In March, through its first value-up disclosure after listing, it said it would maintain a shareholder return ratio of 25% or more based on consolidation net income.
Existing large cosmetics companies are also joining the shareholder return trend. LG H&H(051900) set its semiannual dividends for both common and preferred shares at 1,500 won per share, up 50% from a year earlier. From 2025 to 2027, it will keep its payout ratio at 30% or more based on consolidation net income, and it plans to cancel all treasury shares it holds.
Amorepacific Holdings(002790) also canceled 3 million common shares in Feb. last year and canceled an additional 3 million in Feb. this year. The shares canceled this year were worth about 93 billion won at the time, equivalent to about 3.8% of issued common shares.
The most direct backdrop for corporations strengthening shareholder-friendly policies is cited as increased cash generation from the growth of overseas operations. In the past, K-beauty corporations prioritized spending to raise brand awareness and secure overseas distribution, limiting room for dividends or treasury share purchases. Recently, however, as revenue and profit have grown, they have built the financial base to continue growth investments while returning profits to shareholders.
Rising interest from overseas institutional investors is also driving the expansion of shareholder returns. According to corporate data research firm CEO Score, in the cosmetics sector, cases in which foreign investors held 5% or more equity increased from two in Jun. last year to nine in Jun. this year. The increase was the largest among all sectors.
Shareholder-friendly policies are also serving as a positive signal for share prices. d'Alba Global's shares rose as much as 9.62% intraday to 245,000 won on the 4th, immediately after opening its shareholder benefit mall. LG H&H, which released improved second-quarter results and an expanded interim dividend on the 29th of last month, saw its shares rise 11% the next day to 292,000 won.
A cosmetics industry official said, "Current share prices of K-beauty corporations reflect high expectations for growth," and added, "From corporations' standpoint, the need has grown to prove through active shareholder return policies that sales growth is not limited to a specific hit product or a passing fad but is leading to stable cash generation."