Daekyo in Crisis, Escaping Deficit through Selection and Concentration

Reappointment of Inside Director at Shareholders' Meeting on the 22nd
Continuous Deficits Since Inauguration... Operating Loss of 27.7 Billion Won Last Year
Expecting Turnaround to Profit This Year Through Focused Strategy

Daekyo, which has been mired in long-term deficits, is challenging a turnaround in performance this year by strengthening the competitiveness of its core education business. Additionally, the CEO is personally overseeing overseas operations to seek a reversal.

Daekyo plans to hold a shareholders' meeting on the 22nd to appoint Byun Gyusook, Head of the Education Services Division (Management Leader), as a new inside director. Byun has served as the head of the Noonopi Busan Headquarters since 2021 and has been leading the growth of Daekyo's core business as the head of the Education Services Division since last year. This is interpreted as a commitment to strengthening core business competitiveness.

At the end of last year, Daekyo also carried out an organizational restructuring. The previous four-division system consisting of ▲Noonopi Service Division ▲Content Service Division ▲Digital Service Division ▲Management Service Division was reduced to two divisions: ▲Education Services Division and ▲Management Strategy Division. By incorporating the Noonopi Headquarters under the Education Services Division, the company plans to focus and concentrate on the education services sector.

Daekyo is also strengthening its overseas business. Recently, Daekyo established a 'Global HQ' organization directly under CEO Kang Hojun. CEO Kang, the eldest son of Daekyo Group Chairman Kang Youngjoong, served as head of overseas business for 10 years before becoming CEO in 2021.

As the person most knowledgeable about overseas business within Daekyo, CEO Kang is personally taking charge of the new overseas early childhood education center business with the determination to lead it to success. Last year, overseas education business sales amounted to 16.7 billion KRW, accounting for only 2.5% of total sales. However, it is evaluated to have high growth potential as it recorded sales exceeding 20 billion KRW before the COVID-19 pandemic.

Kang Hojun, CEO of Daekyo Group.

Daekyo is currently in crisis. Since recording its first deficit in the company's history in 2020, it has not escaped losses. In CEO Kang's first year in 2021, the company posted an operating loss of 28.3 billion KRW. The following year, the operating loss worsened to 49.9 billion KRW. At the end of last year, the operating loss was 27.7 billion KRW, reducing the deficit compared to the previous year but failing to achieve the targeted return to profitability.

Daekyo is currently tightening its belt. The total number of employees decreased from 2,505 in 2022 to 2,409 in 2023, a reduction of about 100 employees. The total remuneration for executives was also cut by 25%. Daekyo plans to reappoint CEO Kang as an inside director for a three-year term at the upcoming shareholders' meeting. A full evaluation of CEO Kang's management capabilities is expected.

A Daekyo official said, "This year, we plan to focus and concentrate on new businesses," adding, "We aim to reduce the scale of advertising and promotional expenses in our core business to reduce the deficit and strive for performance recovery, expecting a return to profitability."

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