Hugel Hugel(145020), the No. 1 corporations in Korea's botulinum toxin market, set a record for its best-ever first-half results this year on the back of expanded global sales. With sales growing in major overseas markets including the United States and momentum continuing in the domestic market, it is expanding its footing as a global corporation.
However, the possibility of governance restructuring by the largest shareholder, CBC Group—such as a future sale of Hugel or a relisting overseas—remains a variable.
CBC Group is a Singapore-based private equity fund (PEF) manager specializing in bio and healthcare investments. The market is watching what strategic choices CBC Group will make going forward as Hugel's growth and corporate value have risen.
◇ Broad-based growth across key global regions, domestic revenue also on the rise
According to the industry on the 9th, Hugel posted first-half consolidation revenue of 254.5 billion won, operating profit of 103.7 billion won, and net profit of 85.3 billion won. Those were up 27.2%, 8.4%, and 23.5%, respectively, from a year earlier. Revenue, operating profit, and net profit were all the largest ever for a first half.
Overseas operations drove the earnings growth. In the first half, domestic and overseas revenue accounted for 35% and 65% of total revenue, respectively, with overseas revenue outpacing domestic sales. In key product lines such as botulinum toxin, fillers, and skin boosters, overseas revenue made up 75.2%.
By region, Asia-Pacific accounted for 41.7% of total revenue, North and South America 16.2%, and the European Union (EU) and other regions 17.3%. Notably, revenue in North and South America, including the United States and Brazil, more than doubled from a year earlier. Asia-Pacific and Europe also recorded growth rates in the mid-to-high 20% range, showing broad-based growth across major regions.
Domestic operations also continued to grow. Hugel's domestic revenue in the second quarter rose 8% from a year earlier. While overseas operations are driving overall growth, the company is expanding revenue in the domestic market as well, maintaining a stable earnings base.
The expansion of U.S. operations is cited as a future growth driver. Hugel switched to a direct sales system in the United States last month. Centered on its local subsidiary, it is accelerating its push into the U.S. market by strengthening marketing. The effects of the shift to direct sales in the United States are also cited as a future growth factor.
Based on growth in major global markets, Hugel plans to raise U.S. revenue to around 30% of companywide revenue by 2028.
◇ Status of CBC Group's governance restructuring remains "undecided"
Separately from earnings, the market remains interested in the future investment strategy of the largest shareholder, CBC Group.
Hugel was acquired in 2022 by a consortium led by CBC Group. CBC Group participated in the acquisition with GS Group, IMM Investment, and the United Arab Emirates (UAE) sovereign wealth funds Mubadala, and is now the largest shareholder with 43.53% equity in Hugel.
Bloomberg previously reported that CBC Group was reviewing governance restructuring options for Hugel, including delisting. Options mentioned included delisting Hugel to turn it into an unlisted company and then relisting it on the Hong Kong stock exchange, and at the time, there were also reports that CBC Group was holding early discussions with advisors to secure funding needed to pursue the transaction.
However, no specific governance restructuring measures—such as delisting or an overseas relisting—have been decided so far. On the 6th, along with its earnings release, Hugel issued a clarification disclosure on rumors or reports, reaffirming its existing position that "nothing has been finalized to date." As no concrete decision has been made by the largest shareholder, related matters are being re-disclosed every three months as undecided.
The market also notes that CBC Group may reconsider its future investment strategy. That is because Hugel's business base and corporate value have changed significantly compared with 2022, when governance restructuring was considered.
An investment banking (IB) industry source said, "Back in 2022, Hugel had not grown to this extent," and added, "Given Hugel's current stable earnings and rising corporate value, as well as changes in the interest-rate environment, CBC Group could reconsider its existing investment strategy."
In fact, in 2022 Hugel had not yet received U.S. Food and Drug Administration (FDA) approval for key products, and its U.S. business had not begun in earnest. Entry into the Chinese market was also at an early stage. In contrast, it now has U.S. FDA approval and is expanding local sales, while strengthening its market push through a direct sales system in the United States. It has also expanded operations in major markets such as China and Europe, broadening its global business base.
There has also been no immediate move to recover investment funds in terms of the financing structure. The CBC Group consortium recently completed refinancing of acquisition financing worth 765 billion won and extended the maturity to June 2029. While the market had mentioned a potential sale, it in fact chose a rollover structure that extends maturity. There were no notable changes in recovery-oriented capital policies such as dividends or treasury shares during this refinancing process.
However, given that CBC Group is a private equity manager, a range of options remains open in the mid-to-long term for recovering investment funds—this is a variable. But industry views say it is difficult to interpret this as an ongoing sale or delisting move.
Meanwhile, Hugel plans to hold an extraordinary shareholders meeting on the 21st to process agenda items including approval of holding and disposal plans for treasury shares, the appointment of independent director Patrick Holt as a Commissioner to the audit committee, and approval of granting stock options.