Korean beauty (K-beauty) companies are increasingly sharing the fruits of their global success with shareholders, implementing more robust shareholder return policies. This trend includes expanding dividend payouts and offering discounts on products through dedicated shareholder platforms. These moves are driven by increased cash flow from global business expansion and growing demands from investors and the government for shareholder value returns.
Expanding Shareholder Benefits
Companies are actively enhancing their shareholder return strategies. For instance, Dalbgle Global (483650) recently launched a web-based platform allowing shareholders to purchase company cosmetics at discounted prices. Previously, this service was only accessible via mobile trading systems through four securities firms. The new platform, however, can be accessed from PCs and mobile devices, regardless of securities firm affiliation.
The range of discounted products has also expanded from five to ten items. Discounts are tiered into three levels – First, Royal, and Signature – based on the number of shares held and the holding period. Each tier offers a base discount rate and a monthly purchase limit. Holding shares for over 181 days further increases the discount limit, incentivizing long-term investment and repeat purchases.
Beyond product discounts, Dalbgle Global is also bolstering its financial shareholder returns. The company announced plans to dispose of 63,364 of its treasury shares, acquired through a recent stock repurchase program, within the year. An exception is made for 20,000 shares designated for employee stock compensation. Furthermore, the company aims to maintain shareholder return levels, including dividends and treasury stock acquisition/disposal, at over 25% of its capital from this year through 2028.
Other Companies Follow Suit
APAL (278470) also decided on an interim dividend of 2,500 won per common share, totaling approximately 93.6 billion won. Since its listing in 2024, APAL’s cumulative shareholder returns, combining treasury stock acquisition/disposal and cash dividends, have reached around 400 billion won. In March, the company committed to maintaining a dividend payout ratio of over 25% based on consolidated net income, starting after its listing.
Major established beauty conglomerates are also intensifying their shareholder return initiatives. LG Household & Health Care (051900) decided to increase its interim dividend for both common and preferred shares to 1,500 won per share, a 50% rise compared to the previous year. From 2025 to 2027, the company plans to maintain a dividend payout ratio of over 30% based on consolidated net income and intends to dispose of all its treasury shares.
Amorepacific Holdings (002790) has also been active in returning value to shareholders. Following the disposal of 3 million common shares in February of the previous year, the company disposed of an additional 3 million shares in February of this year. The value of this year’s disposal was approximately 93 billion won, representing about 3.8% of the issued common shares at the time.
Drivers Behind Enhanced Shareholder Returns
The primary catalyst for these strengthened shareholder return policies is the increased cash flow generated from the global expansion of K-beauty businesses. In the past, K-beauty companies prioritized reinvesting capital into building brand awareness and establishing overseas distribution networks, leaving limited resources for dividends or treasury stock buybacks. However, with recent growth in sales and profits, these companies now possess the financial foundation to pursue growth investments while simultaneously returning profits to shareholders.
The growing interest from foreign institutional investors is another significant factor driving enhanced shareholder returns. Data from CEO Score, a corporate data research firm, indicates a notable increase in foreign investors holding over 5% of shares in cosmetics companies. The number of such cases rose from two in June of the previous year to nine in June of this year, marking the largest increase across all industries.
Positive Impact on Stock Performance
Shareholder return policies are also sending positive signals to the stock market. Following the launch of its shareholder discount platform, Dalbgle Global’s stock price surged by 9.62% during intraday trading on August 4th, reaching 245,000 won. LG Household & Health Care also saw its stock price climb 11% to 292,000 won the day after announcing its second-quarter earnings and expanded interim dividend on August 29th.
Industry observers note that current K-beauty stock valuations largely reflect high expectations for future growth. Companies are increasingly recognizing the need to demonstrate through proactive shareholder return strategies that their revenue growth is not solely dependent on specific hit products or temporary trends, but is supported by stable cash flow generation. This strategic shift aims to solidify investor confidence and reflect the company’s sustainable value.
