Despite the ongoing slump of its flagship hangover-relief drink “Condition,” HK inno.N is expected to surpass ₩1 trillion in annual revenue this year. Although the company has been hit by a recall incident and continued sales declines in its health & beauty (H&B) business, its prescription drug (ETC) division—which accounts for more than 90% of total revenue—is offsetting the weakness.
According to the Financial Supervisory Service’s electronic disclosure system on the 25th, HK inno.N reported third-quarter revenue of ₩260.8 billion and operating profit of ₩25.9 billion, up ₩31.3 billion (13.6%) and ₩3.7 billion (16.7%), respectively, from the same period last year (₩229.5 billion and ₩22.2 billion).
On a cumulative basis through Q3, revenue reached ₩771.3 billion and operating profit ₩70.8 billion, representing increases of ₩109.9 billion (16.6%) and ₩7 billion (10.9%) year-over-year.
The strong performance was driven by the company’s core ETC products, particularly K-CAB and IV fluid solutions. Through the third quarter, K-CAB recorded cumulative sales of ₩143.1 billion, while IV solutions posted ₩106.1 billion—growing 14.8% and 16.9% year-over-year, respectively.
The challenge lies in the H&B business. In June and July, some beverages manufactured by Dongwon Systems showed abnormalities during the production process, leading to a full recall. As a result, H&B revenue fell more than 34% year-over-year, and the segment turned to an operating loss.
Even excluding the recall impact, sales of Condition have been declining. Cumulative third-quarter revenue for Condition dropped from ₩45.3 billion in 2023 to ₩37.5 billion this year. Sales of Hutgaesoo also shrank from ₩9.7 billion to ₩6.6 billion over the same period.
Fortunately, the H&B division represents only a small portion of overall revenue. On a cumulative basis through Q3, Condition accounted for just 4.9% of total sales, and Hutgaesoo only 0.9%. The recall impact also appears to be easing. Deliveries resumed at the end of July, and analysts expect fourth-quarter results to normalize once compensation from Dongwon Systems is reflected.
For these reasons, the industry sees no major issue with HK inno.N’s upward earnings trend.
Shin Young Securities described the ETC division as a “model performer” and the H&B division as a “problem child,” yet still projected a positive full-year outlook. The firm forecasts HK inno.N will post annual revenue of ₩1.0353 trillion (approx. USD 767 million) and operating profit of ₩111.3 billion.
As of last year, seven traditional pharmaceutical companies recorded more than ₩1 trillion in annual sales: Yuhan Corporation (₩2 trillion), Green Cross (GC), Chong Kun Dang, Kwang Dong Pharmaceutical, Hanmi Pharmaceutical, Daewoong Pharmaceutical, and Boryung.
If HK inno.N surpasses ₩1 trillion (approx. USD 740 million) this year, it will become the eighth member of the “₩1 Trillion Club.”
