SPC Samlip, Earnings Up with 'Pokemon Bread'... 19 Consecutive Years of Dividends [Corporate Exploration]

[Asia Economy Reporter Jang Hyowon] SPC Samlip, the manufacturer of Pok?mon bread that continues to cause a 'sold-out frenzy,' is also attracting attention in the stock market. The securities industry forecasts that the popularity of Pok?mon bread will continue this year, expecting an improvement in SPC Samlip's performance. In addition, SPC Samlip has been paying dividends for 19 consecutive years, raising expectations for large-scale dividends if strong earnings are recorded.

Pok?mon Bread + Rest Areas Also ‘Booming’

SPC Samlip started in 1945 when founder Heo Changseong established Sangmidang. Later, in 1968, it was incorporated as Samlip Food Industrial Co., Ltd., evolving into a comprehensive food company by engaging in confectionery and food sales and distribution businesses. Its main businesses consist of △ the ‘Bakery Division’ manufacturing and selling bread, sandwiches, and cakes △ the ‘Food Business Division’ manufacturing and selling flour, eggs, processed meat products, fresh foods, and operating rest areas △ the ‘Distribution Business Division’ distributing ingredients and related food materials and providing group catering △ and the ‘Other Business Division’ including logistics. As of the end of Q1 this year, the sales composition ratio by business division was Bakery 24.1%, Food 24.7%, Distribution 47.8%, and Others 11.5%. Internal transactions accounted for 8.1%. SPC Samlip receives supplies such as food ingredients through its subsidiary SPC GFS.

SPC Samlip recorded its highest-ever Q1 performance with sales exceeding 700 billion KRW. Q1 sales reached 724.8 billion KRW, an 11.1% increase compared to the same period last year. Operating profit also rose by 30.1% year-on-year to 13.6 billion KRW. The main driver of this performance increase was ‘Pok?mon bread.’ SPC Samlip reacquired the Pok?mon license after 16 years and launched Pok?mon bread at the end of February. This bread includes ‘Ttibuseal,’ Pok?mon character stickers, and collecting these Ttibuseal stickers became a trend, causing a Pok?mon bread sold-out frenzy. Consequently, Pok?mon bread sales were estimated at about 6 billion KRW in March, 9 billion KRW in April, and 10 billion KRW in May. The securities industry expects approximately 30 billion KRW in sales from Pok?mon bread alone in Q2 this year. They also anticipate the popularity of Pok?mon bread to continue until the end of this year. Kiwoom Securities researcher Park Sangjun stated, "SPC Samlip plans to release 161 types of 2nd generation Pok?mon Ttibuseal stickers starting in July and focus on expanding premium products," adding, "The differentiated performance improvement trend is expected to continue in the second half."

Not only Pok?mon bread but also the rest area business is showing signs of a turnaround. In 2019, SPC Samlip acquired a 10-year operating right for Gapyeong Rest Area located on the Seoul-Chuncheon Expressway for 258.1 billion KRW. In addition, it operates six rest areas nationwide.

Hana Financial Investment researcher Shim Eunju analyzed, "Although the rest area business was sluggish due to COVID-19, traffic has rapidly recovered recently with the reopening (lifting of lockdowns), and profits are expected to recover to the breakeven point (BEP) this year," adding, "Meaningful performance improvements are expected through the second half as the effect of new product launches in the bakery segment is fully reflected." According to financial information provider FnGuide, SPC Samlip's sales consensus for this year is 3.2601 trillion KRW, a 10.64% increase compared to 2.9467 trillion KRW in the previous year. The operating profit forecast is also expected to grow by 22.36% to 81 billion KRW.

19 Consecutive Years of Dividends

SPC Samlip has paid dividends for 19 consecutive years based on a stable business structure. As of the end of last year, SPC Samlip recorded a net profit of 40.5 billion KRW on a consolidated basis, of which 9 billion KRW was paid as dividends. The dividend payout ratio was about 22.2%. Remarkably, even in 2020, when it posted a net loss of 12.4 billion KRW, it paid dividends amounting to 5.9 billion KRW.

The reason for consistent dividends can be attributed to the high ownership ratio of the founding family. The Heo family and related parties hold 73.58% of SPC Samlip's shares. The largest shareholder is Paris Croissant with a 40.66% stake. Paris Croissant's largest shareholder is Chairman Heo Youngin, who holds 63.5%. Additionally, Chairman Heo holds 4.64%, his eldest son Heo Jinsu, President of Paris Croissant, holds 16.31%, and his second son Heo Heesoo, Vice Chairman of SPC Group, holds 11.91% of SPC Samlip shares.

However, last year SPC Samlip implemented a differential dividend, paying 1,500 KRW per share to minority shareholders and 1,000 KRW per share to major shareholders. This is interpreted as part of efforts to enhance minority shareholder value by sharing company profits more with general shareholders.

This content was produced with the assistance of AI translation services.