CEO GREETING
COMPANY
SUNJIN BEAUTY SCIENCE
Dear Respected Shareholders of SUNJIN BEAUTY SCIENCE,
Hi, how are you? I’m Sungho Lee, CEO of SUNJIN BEAUTY SCIENCE.
This is the second shareholders’ meeting after SUNJIN was listed on the KOSDAQ in January 2021.
This is the first time SUNJIN has prepared a shareholder letter. I always have been thinking I wanted to write a shareholder letter like Warren Buffett from Berkshire Hathaway or Jeff Bezos from Amazon, now I put it into practice and organized it.
In 2022, SUNJIN set a new record in sales and profits. During the COVID-19 pandemic in 2020 and 2021, SUNJIN has developed the countermeasures and achieved great growth with continuous efforts and passion. Compared to the previous year, the sales increased by 15.6 billion won and by 32%, recording 64.3 billion won in consolidated sales since the establishment of the company. This is the highest record since our company was established.
Growth in Cosmetic Raw Materials
Cosmetic raw materials, SUNJIN’s main
business, grew by 10 billion won and by 28% compared to the previous year. In
particular, sales growth in EU region is remarkable. SUNJIN achieved 66% growth
to 17.7 billion won from 10.6 billion won in the previous year.
| Region | 2019 | 2020 | 2021 | 2022 |
|---|---|---|---|---|
| Europe | 10,628 | 10,805 | 10,649 | 17,577 |
| Greater China | 6,028 | 6,607 | 8,308 | 8,756 |
| Korea | 7,946 | 6,892 | 8,133 | 7,586 |
| America | 2,241 | 2,045 | 3,354 | 4,340 |
| Turkey, MENA | 2,192 | 1,653 | 1,797 | 2,950 |
| Asia | 1,029 | 1,051 | 1,297 | 2,103 |
| Total | 30,065 | 29,053 | 33,536 | 43,311 |
[Sales of Cosmetic Raw Materials by region based on Korean headquarter]
Establishment of SUNJIN BEAUTY SCIENCE Italian Branch
On July 1, 2022, SUNJIN BEAUTY SCIENCE Italian branch was established near southeastern Milan, Italy, a cluster of Italian cosmetics industry, one of the core countries in EU cosmetics industry.
This is the first case of establishing a branch in Europe among Korean cosmetic raw material companies and it is recording a surplus in half a year since the branch was established.
Foray into the Cosmetics ODM Business
In 2022, SUNJIN achieved great growth in the cosmetics raw material business and made a foray into the cosmetics ODM business newly.
This is one of the rare cases in the world. SUNJIN differentiates the business from general ODM business. 1) specializes in OTC ODM based on the US FDA utilizing the strengths of a US FDA-certified cosmetic raw material manufacturer, 2) incorporates differentiated materials directly into the various formulations, and 3) introduces the business to global cosmetic raw material customers and uses it for raw material promotion as well.
SUNJIN expects to be able to create new revenue sources through it and will have differentiated competitiveness in the cosmetics ODM business.
Relocation of the Headquarter in Seoul
In August 2022, research, sales and management departments excluding production moved to the 8th floor of Hanwha 2nd Biz Metro which is a knowledge industry center located in Gasan-dong, Geumcheon-gu, Seoul. It is a great pleasure to welcome our shareholders to our newly relocated headquarter in Seoul today.
SUNJIN always strives to provide the best working environment for our employees and this Seoul headquarter relocation is one of those efforts. We will work harder in a new environment and present better products and services.
Sale of Ansan Factory, Full Relocation of Janghang Factory, Start of F3 Factory
The operation in Ansan factory was shut down in 2022 and the factory was sold for 25.785 billion won. The entire integrated production began at Janghang factory from August 2022.
We plan to improve profitability by realizing manufacturing cost reduction through production efficiency and utility cost reductions such as electricity and water utilities while fully integrated production began at Janghang factory.
The proceeds from the sale of Ansan factory will be used for repaying debt, paying corporate tax on sales gains, and investing in an additional factory worth 6 billion won.
In August 2022, the construction of the 3rd factory called F3 began at Janghang Campus. F3 factory is scheduled to be completed in March 2023 with a total construction cost of 7 billion won.
Unlike the main mass production in factory 1 and 2, F3 is a pilot-only factory for small-scale production and will play an important role in starting production of products that SUNJIN will focus on in the future.
Closing Remarks
SUNJIN will continue to make every effort to communicate with our shareholders as often and honestly as possible what they would like to know.
In 2022, there were 5 securities reports covering our company. This is said to be unusual for the size of our company. We hoped that our shareholders will earn investment performance equal to the change in intrinsic value per share during the period they have held the stock.
SUNJIN BEAUTY SCIENCE is a growing company.
We will make 2023 a year of accelerating growth and building strong competitiveness in the world. The market may ignore our business performance for the time being, but we will work hard with the belief that it will eventually be confirmed.
Thank you.
2023. 3. 24 CEO Sungho Lee