1. What Happened? A Non-Event for Management Control

On July 17, 2025, Aurora disclosed a change in the related parties of its largest shareholder. This occurred as shares (4,406 shares) belonging to the late Mr. Ho-yeol Noh were inherited by his successor. The total stake of the largest shareholder and related parties barely changed, moving from 46.52% to 46.51%. Therefore, this has no impact on management control and is more of an administrative procedure than a key event affecting the stock price.

2. Why Is It a Problem? Shaky Fundamentals

The real issue lies in Aurora’s core business, its fundamentals. The Q1 2025 results shocked the market with a significant year-over-year drop, recording consolidated sales of KRW 79.7 billion and operating profit of KRW 9.7 billion. The main reasons are:

  • ① US Economic Slowdown: A slowdown in the US, Aurora’s main market, led to reduced toy consumption, which was the biggest driver of the sales decline.
  • ② Intensifying Cost Pressure: Rising raw material prices (oil, cotton) and a high Won/Dollar exchange rate (exceeding 1,380) increased cost burdens and eroded operating profit margins.
  • ③ Sluggish Domestic Business: The domestic market also suffered from an economic slowdown and intensified competition.

While the sale of its subsidiary (Aurora World Junan Co.,LTD) had a short-term negative impact on revenue, it can be interpreted as a strategic decision to enhance long-term production competitiveness.

3. So, What’s the Stock Outlook? Cloudy in the Short Term

With deteriorating fundamentals, it is difficult to expect a short-term stock price rally. The poor Q1 performance is already weighing on the stock, and a continued economic slowdown in the US and Europe could worsen the earnings slump.

However, long-term growth potential remains. Aurora is striving to secure growth engines through the effects of its ‘Mary Meyer’ acquisition and the launch of new character lineups. If these strategies successfully take hold in the market and the macroeconomic environment improves, the stock could seek a rebound along with a fundamental recovery.

4. Investor Action Plan: What to Monitor Now

For those considering an investment in Aurora at this time, it is crucial to continuously monitor the following three points:

  • ✅ Success of Growth Strategies: Keep a close eye on the market’s reaction to the ‘Mary Meyer’ acquisition synergy and new characters.
  • ✅ Changes in Macroeconomic Indicators: Carefully track US consumer indicators, the Won/Dollar exchange rate, and raw material price trends.
  • ✅ Future Earnings Announcements: Whether a clear recovery trend appears in the Q2 results and beyond will be the key to a stock price rebound.

In conclusion, it’s time to look past the shareholder disclosure and focus on whether the company’s fundamentals can recover.