1. What Happened?
Zero to Seven’s revenue grew by 10.4% in H1 2025, but the operating loss in the Gongjungbi Cheok division limited overall profit improvement. The consistent growth of the packaging business supported the overall results.
2. Why These Results?
- Gongjungbi Cheok: Declining birth rates in Korea and intensifying competition in the Chinese market led to deteriorating profitability. Despite efforts to expand online channels and Asian markets, the division struggled.
- Packaging: New market development and enhanced price competitiveness drove growth in both revenue and operating profit. Expansion into new markets, such as health functional foods, offers further potential.
3. What’s Next?
The future performance of Zero to Seven hinges on the recovery of the Gongjungbi Cheok business. While the stable growth of the packaging business is positive, a turnaround in the baby care division is crucial.
4. Investor Action Plan
- Long-term Investors: Considering the growth potential of the packaging business and the possibility of a rebound in Gongjungbi Cheok, a staggered investment strategy could be considered.
- Risk Management: Closely monitor the performance of the Gongjungbi Cheok division, its performance in overseas markets, and adjust portfolio weightings accordingly.
- Market Monitoring: Pay close attention to changes in macroeconomic indicators such as exchange rates, raw material prices, and the global economy.