Coway Q2 operating profit rises 4.3% on overseas sales, rental growth
Coway reported Q2 revenue of KRW1.4422 trillion and operating profit of KRW253.2 billion, up 14.6% and 4.3% year-on-year, both record quarterly highs. Overseas revenue rose 24.2% to KRW587.5 billion, with Malaysia leading at KRW434.5 billion, Thailand growing 53.9%, and the United States delivering an 83.0% jump in operating profit. Domestically, expansion into wall-mounted air conditioners, food waste disposers, and home medical devices drove net rental account additions up 51.6% to 242,000. Total rental accounts rose 11.6% to 12.14 million. Market signal: Coway's overseas engine is no longer supplementary. It is the primary driver of earnings growth. When Malaysia alone generates more revenue than the US and Thailand combined, the export of the subscription model has moved well past proof of concept. (Source: The Korea Times)
LG Electronics’ appliance subscription revenue reached a record KRW1.15 trillion in the first half, up 8.2% year-on-year and 3.1 times its 2022 level. Growth is extending beyond households through B2B housing partnerships and Southeast Asian expansion. Malaysia has exceeded 300,000 cumulative subscription product sales, while Thailand has surpassed 30,000 accounts. Market signal: B2B housing contracts create a scalable distribution channel, while Southeast Asia gives LG a second growth engine beyond Korea. (Source: The Korea Herald)
SK Networks reported Q2 operating profit of KRW24.8 billion, down 42.3% year-on-year. Subsidiary SK intellix was the primary drag, with operating profit falling 49% to KRW9.9 billion on intensified water purifier rental competition and higher advertising spend. Revenue fell 4.7% to KRW1.4444 trillion. Market signal: SK intellix's 49% drop is the clearest evidence that rental market growth is not lifting all operators. The same pressure driving Coway's account growth is squeezing those without equivalent service infrastructure. (Source: Chosunbiz)
LS Securities kept its Buy rating on Coway and raised its target price from KRW110,000 to KRW120,000, against a closing price of KRW97,600. Analyst Oh Rin-a cited double-digit account growth across domestic and overseas segments, with Malaysia, Thailand, and the United States driving mid- to long-term earnings. Market signal: a target price raised on overseas rental account growth validates the export model as a durable earnings driver, not a one-cycle tailwind. This begins to close the valuation gap flagged last week. (Source: Chosunbiz)
The global smart home appliances market is projected to grow from USD185.14 billion in 2025 to USD520.93 billion by 2035 at a 10.9% CAGR, driven by voice-assistant adoption and energy management demand as OECD electricity costs rose 18.4% between 2022 and 2024. Subscription services and AI are increasingly the primary monetisation layer. Market signal: a USD520 billion market by 2035 is the backdrop every rental operator is competing against. Embedding AI into subscription tiers now is positioning for the decade's primary revenue layer. (Source: EIN News / Market Research Future)
Cuckoo International (MAL) reported a 3.2% rise in Q2 net profit to RM28.22 million, despite revenue falling 19.8% to RM245.93 million as softer demand reduced unit sales. Gross margin improved to 36.3% from 31.7%, helped by lower product costs, lower customer-acquisition costs, and reduced operating expenses. First-half revenue fell 21.4%. Market signal: Cuckoo’s results show that margin discipline can cushion a subscription business during weaker demand, but recurring revenue does not eliminate the need for customer growth. (Source: The Edge Malaysia)