Overcoming the 'Horse Oil Cream' Slump with 141.2 Billion Won in Sales... B&B Korea Attempts KOSDAQ Listing Again, Riding the K-Beauty Tailwind

The benefits of the K-beauty craze are spreading beyond brand companies to cosmetics manufacturers. B&B Korea, which is in charge of product development and production, also recorded its highest performance since its founding last year. The company, which once made a name for itself in China with its 'horse oil cream' but suffered a sharp decline in sales after the THAAD incident, has returned as an ODM company with 100 billion won in sales after 10 years. B&B Korea's consolidated sales in 2025 were 141.17 billion won, up 75.8% from the previous year's 80.32 billion won. Operating profit increased by 57.8% from 16.6 billion won to 26.21 billion won. The operating profit margin was 18.6%. Sales, which were 23.44 billion won in 2021, increased to 32.95 billion won in 2022, 44.21 billion won in 2023, 80.32 billion won in 2024, and reached 141.17 billion won last year. It increased about sixfold in four years.

As domestic cosmetics exports reached a record high of 11.4 billion dollars last year, production orders from domestic indie brands that have grown overseas have led to B&B Korea's performance. Last year, South Korea's cosmetics exports increased by 12.3% compared to the previous year, and the United States surpassed China to become the largest export destination.

'One-Stop ODM' Handling Everything from Planning to Production

B&B Korea is an ODM company that develops and produces cosmetics on behalf of brands. Unlike OEM, which produces only products according to specifications set by customers, ODM involves the manufacturer in product concepts, raw materials and formulation development, and package selection. B&B Korea promotes a 'total one-stop ODM' that adds brand planning, design, marketing, and distribution support to this. Focusing on skincare, it has developed capsule formulations and two-layer formulations containing two separated contents. It also conducts OBM business, creating names and concepts for own brands together.

Its external size is smaller than Cosmax or Kolmar Korea, but its profitability is on the high side. Last year, the operating profit margin of Cosmax was about 8.2%, Kolmar Korea 8.8%, and Cosmecca Korea 13%. B&B Korea recorded 18.6%, which is higher than them. However, since the consolidation targets and business compositions of each company are different, it is difficult to simply compare their profit margins.

73% of Sales Came from Two Clients

Behind the rapid growth is a concentration of customers. Last year, there were two clients that accounted for more than 10% of B&B Korea's sales. The sales generated from these clients totaled 103.38 billion won, amounting to 73.2% of its consolidated sales. It increased by 12.4 percentage points from 60.8% in 2024. The names of the clients were not disclosed in the audit report. Client companies disclosed to the company and the media include d'Alba Global, APR's Medicube, and Dr. Pepti, but it is not confirmed whether these exactly match the two clients mentioned in the audit report. Sales related to d'Alba Global reportedly increased from 18.3 billion won in 2022 to 39.6 billion won in 2024.

Sales recorded by B&B Korea as direct exports amounted to 2.47 billion won last year, accounting for a mere 1.8% of the total. Rather than raising overseas sales directly, its structure is closer to indirectly benefiting from K-beauty growth as domestic client brands export their products. If client brands continue to grow, orders will also increase, but if major clients change their production sites or experience a drop in sales, the impact on performance could also be substantial.

It also operates its own brands through its subsidiary JL Ventures. JL Ventures recorded sales of 17.15 billion won and a net profit of 1.69 billion won last year. Derma Factory and Lovey Dovey are among this company's brands. Although there is a burden that it could become a competitor to ODM client companies, it is also a means to lower the dependence on specific clients.

Sold in the 120 Billion Won Range, Changed Hands Again After 10 Years

B&B Korea's growth process was not smooth. Founded by CEO Ham Bong-chun in 2011, it recorded sales of 50.5 billion won and an operating profit of 21.3 billion won in 2015 as horse oil cream gained popularity in China. However, as sales in China were blocked due to the THAAD incident the following year, sales plummeted to the low 10 billion won range, and it turned to a deficit.

SKS Private Equity and Waterbridge Partners established a special purpose vehicle, WS Beauty, and acquired B&B Korea in 2015 when horse oil cream was selling very well. The acquisition amount at the time varied from 125 billion won to 129 billion won, depending on the report. As performance plummeted immediately after the acquisition, it was reportedly not easy to sell it even at 60 billion won, which is half of the purchase price, at one point. Its performance recovered later as it expanded its product lines and clients and strengthened its ODM and OBM businesses.

The new owner is Seoyoung E&T, controlled by the owner family of HiteJinro. Seoyoung E&T established a special purpose vehicle named Jinbaek Global and acquired an 81.02% stake in B&B Korea for 100.2 billion won in 2024. The following year, it bought the remaining 18.98% stake for 27.7 billion won, raising its stake to 100%. The total acquisition amount is 127.9 billion won.

From the perspective of the previous private equity funds, they disposed of the company they had held for about 10 years at a price similar to the original purchase principal. It is hard to say they earned a large investment return, but in a situation where the possibility of losing investment funds was once mentioned, it holds meaning that they recovered the principal level.

Dividends Followed After Transferring 46 Billion Won in Capital Surplus

Dividends before and after the acquisition are also worth examining. At an extraordinary general meeting of shareholders in 2024, B&B Korea transferred 46 billion won of capital surplus to retained earnings. In the same year, 7.82 billion won was deducted from retained earnings as dividends, and in 2025, a cash dividend of 12 billion won was paid. In March this year, an additional 9 billion won was distributed as dividends. It cannot be concluded that the transfer of capital surplus was solely a decision for dividends. However, it is a fact that this measure increased the dividend-distributable retained earnings. The total amount determined for dividends in the recent three closing periods is 28.82 billion won.

Out of the 7.82 billion won dividend in 2024, 5 billion won was offset against the corporate bond investment held by WS Beauty. Therefore, not all of the 7.82 billion won went out as cash. On the other hand, 12 billion won was actually paid in cash last year. Last year, the cash generated by the company from operations was 18.97 billion won. From this, after paying the 12 billion won dividend, corporate taxes, and interest, the remaining cash flow from operating activities was 6.06 billion won. In the same year, it spent 12.45 billion won on acquiring tangible assets and newly raised 5 billion won in long-term borrowings during the process of acquiring the site for the new factory.

Shareholder dividends were also carried out at a time when the company was expanding growth investments. At the end of last year, cash stood at 12.33 billion won, and net cash, excluding borrowings and lease liabilities, was about 4.55 billion won, indicating its financial status is not at an unstable level. However, accounts receivable increased from 7.53 billion won to 18.64 billion won, and inventory assets grew from 9.42 billion won to 12.65 billion won, so the profit increase did not accumulate directly as cash.

Half of the Public Offering Shares Go to Existing Shareholders

B&B Korea filed a preliminary review for listing on the KOSDAQ with the Korea Exchange on May 21st. It is trying again after a previous listing attempt with NH Investment & Securities as the underwriter fell through. The lead underwriter this time is Mirae Asset Securities. The scheduled number of public offering shares is 1,866,000 shares. New shares account for about 51%, and the sale of old shares by existing shareholders (secondary offering) accounts for about 49%. The proceeds from the sale of old shares will go to the largest shareholder, Jinbaek Global, not the company.

Jinbaek Global raised a considerable amount of external funds during the acquisition of B&B Korea. At the time of the initial 100.2 billion won acquisition, the amount invested by Seoyoung E&T was 25 billion won, and the rest was financed through acquisition financing and convertible bonds. After acquiring the remaining stake, the borrowing agreements from financial institutions increased to the 90 billion won level, and it is reported that Seoyoung E&T provided a joint guarantee for the interest payment obligations.

Corporate value forecasts also still have a wide variation. Initially, figures around 300 billion won to over 500 billion won were mentioned, and after the preliminary review request, reports anticipating 600 billion won to 700 billion won by applying the price-to-earnings ratio of peer cosmetics companies also emerged.

Listing Equation More Complex than Performance

B&B Korea is building a new factory measuring about 2,800 pyeong in the Hagun Industrial Complex in Gimpo. It plans to increase its production capacity with the goal of operating the first factory in 2027 and the second factory in 2028. The site for the new factory acquired last year and the related construction-in-progress assets amount to 11.34 billion won. Based solely on performance, the timing for a listing is not bad. Sales increased sixfold over four years, and the operating profit margin is higher than major domestic ODM companies. It is also clear that the company, which suffered a major blow by relying on a single horse oil cream product and the Chinese market in the past, has changed its constitution into an ODM company supporting various K-beauty brands.

On the other hand, 73% of sales are concentrated on two clients, and nearly half of the public offering volume consists of a secondary offering. The borrowings used by the largest shareholder for the acquisition and pre-listing dividends must also be examined together. If it passes the exchange's review, B&B Korea will serve as an example showing how far the overseas growth of K-beauty brands can elevate the corporate value of mid-sized ODM companies. During the listing process, it has become important how persuasively the company explains to the market not only its rapid performance growth but also its customer concentration, the secondary offering, and the largest shareholder's fund recovery structure.