Kyochon 'Oldboy' Returns... Aiming to Reclaim 'No.1 Sales' in the Chicken Industry

Song Mingyu CFO Purchases 2,000 Company Shares
Vice Chairman Song Jonghwa Also Reports Holding 11,455 Shares
"To Enhance Shareholder Value and Strengthen Responsible Management"

Kyochon F&B, which lost its top spot in chicken industry sales, is aiming to recover its performance by leveraging its "Old Boys." Following Vice Chairman Song Jong-hwa, Chief Financial Officer (CFO) Song Min-gyu, who stepped down as CEO of Norang Food last year and returned, recently hinted at strengthening responsible management through the purchase of company shares. Chairman Kwon Won-gang plans to target overseas markets and diversify new businesses with them to usher in a second heyday.

According to the Financial Supervisory Service's electronic disclosure system on the 21st, CFO Song (Executive Director, Innovation Leader of Management Support Division) purchased a total of 2,000 shares of Kyochon F&B stock in two transactions on the 7th and 14th. The acquisition price was 7,920 KRW per share, totaling approximately 15.84 million KRW. Currently, Kyochon F&B's stock price is in the 8,000 KRW range, down by half compared to around 15,000 KRW two years ago. A Kyochon F&B official explained, "CFO Song's purchase of company shares is aimed at enhancing corporate and shareholder value and strengthening responsible management," adding, "This is expected to increase market trust."

Executive Director Song returned as a savior for the struggling Kyochon F&B. He joined Kyochon F&B in 2005 as a manager in the finance team, served as head of the management headquarters, and was appointed CFO in 2015. During his tenure, he successfully carried out important tasks such as strengthening financial soundness, resulting in Kyochon F&B's listing on the KOSPI in November 2020. However, he left the company two months after the listing to become Chief Operating Officer (COO) of Norang Food, which operates Norang Chicken, and was appointed CEO in April 2022.

Executive Director Song returned to Kyochon F&B in November last year. With founder Chairman Kwon returning to the front lines of management in 2022 to restore Kyochon's pride, the plan was to bring back CFO Song, the key figure behind the listing, to pursue a second heyday. In addition to CFO Song, Chairman Kwon also recalled Vice Chairman Song, who led Kyochon's revival from 2003 to 2012, last September. Vice Chairman Song also newly reported holding 11,455 shares (0.05%) of Kyochon F&B stock upon his return.

Currently, Kyochon F&B is facing a crisis amid economic downturn and consumer recession, with intensified competition in the chicken industry. Operating profit plunged from 40.962 billion KRW in 2021 to 8.84 billion KRW in 2022. Although operating profit was raised to 24.924 billion KRW last year by increasing chicken prices by up to 3,000 KRW in April, reducing raw material procurement costs, and cutting headquarters staff, the backlash from the price hike led to online boycotts, shrinking the company's size.

After losing the top sales position to bhc Chicken in 2022, sales last year dropped 14% to 444.992 billion KRW from 517.457 billion KRW the previous year. This is even lower than the sales of 447.628 billion KRW three years ago. While operating profit recovered due to Chairman Kwon's characteristic focus on strengthening fundamentals, the company's scale shrank, reducing brand influence.

Kyochon F&B plans to use the return of the Old Boys as a springboard to expand overseas businesses in China, the United States, and other markets, while growing sales through diversification of new businesses. Recently, it started selling a total of six sauces, including three types of "K1 Hot Sauce" and three types of "K1 Home-use Chicken Sauce." It also opened its first buckwheat specialty store, Memildanpyeon, in Yeouido.

A Kyochon F&B official said, "If we had pursued a franchise expansion strategy from the start, sales would have risen sharply, and recovering industry ranking would not have been difficult, but that is not Chairman Kwon's management philosophy," adding, "This year, we will accelerate global market penetration and broaden new business initiatives to catch both sales and profits."

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