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The Coway Icon Water Purifier 3 showcased in a modern interior setting. / Courtesy of Coway

Coway is accelerating its expansion into overseas markets to sustain steady growth momentum, amidst recording improved earnings for the first quarter of this year. As demand for its mainstay rental business expands, centered around Southeast Asia, expectations regarding future earnings growth are also intensifying.

According to relevant industries on the 29th, Coway is deploying its water purifier rental business across domestic markets as well as in Malaysia, the United States, China, Thailand, Indonesia, Vietnam, Europe, Singapore, and India. Most of its major overseas subsidiaries were found to have increased their revenue in the first quarter of this year compared to the fourth quarter of last year.

In particular, the revenue growth trend was highly conspicuous in Southeast Asian regions, including Thailand, Vietnam, Singapore, Indonesia, and Malaysia. The Thai subsidiary, which rents and sells water purifiers and other appliances, recorded a revenue of 55.4 billion won in the first quarter of this year, marking a 22.8% increase from the 42.8 billion won of the previous quarter. Revenue for the Malaysian subsidiary stood at 406.1 billion won, rising 19.1% from the 328.9 billion won of the prior quarter. The revenue growth rates for the Indonesian and Vietnamese subsidiaries also continued their upward trajectories, each recording figures around the 20% mark.

In response, Coway has recently been expanding its investments, focusing primarily on these regions. Following the establishment of a new corporate subsidiary in India last year alongside executing capital increases for its Vietnamese, Indonesian, and Chinese subsidiaries, the company is pushing forward with the establishment of a service subsidiary in Indonesia and a capital increase for its U.S. subsidiary this year.

The expansion of revenue in overseas markets is acting as a positive factor for Coway's future earnings outlook as well. According to the financial information provider FnGuide, Coway's operating profit decreased by 23.5% in the fourth quarter of last year to 186.1 billion won compared to the 243.1 billion won of the preceding quarter, but it subsequently exhibited a recovery phase and is projected to reach 265.2 billion won in the first quarter of this year. This represents an approximate 10% increase even when compared to the same period of the previous year.

Coway recorded a revenue of 1.3297 trillion won in the first quarter of this year. Out of this total, rental revenue accounted for 1.2231 trillion won, making up 92% of entire sales. Lump-sum sales stood at 70.5 billion won at 5.3%, while other revenues hovered around the 2.7% level at 36.1 billion won. As the rental business comprises the absolute majority of total earnings, Coway is anticipated to concentrate on expanding into overseas markets moving forward, centering around core rental businesses such as water purifiers.

Furthermore, over the medium-to-long term, the company is leaving open the possibility of expanding into adjacent business sectors, such as water treatment. Currently, Coway operates industrial equipment manufacturing industries—including water treatment devices—industrial water supply-related construction and operation businesses, furniture manufacturing industries, cosmetics businesses, product brokerages, and sales agencies through its affiliates. However, concrete plans for new business expansions have not yet been finalized at this stage.

An official from Coway stated, "We will concentrate our core capabilities on our mainstay rental and sales businesses, striving to consistently deliver solid performance across our overseas operations as well."

                                                                                                          Lee Chul-hyun