The dividend wave isn’t limited to beauty brands. Entertainment and fashion companies are also getting on board. (Image created by AI/Chat GPT)
SEOUL, April 1 (Korea Bizwire) — South Korea’s publicly listed startup firms are increasingly embracing dividend payouts, signaling a strategic shift from a growth-at-all-costs mindset to one more attuned to shareholder value and corporate transparency.
Traditionally, young companies have reinvested profits to fund expansion, often overlooking dividends. But amid a rising chorus of retail investor demands and renewed national focus on reducing the so-called “Korea Discount”—the chronic undervaluation of Korean equities—startups are now aligning with shareholder return strategies once reserved for mature corporations.
Leading the movement are companies in the thriving K-beauty sector. APR, a cosmetics and medical device firm that listed on the KOSPI in February 2024, plans to initiate cash dividends as part of a three-year shareholder return plan announced last year.
Under the policy, APR will distribute at least 25% of its adjusted net profit annually through 2026, while also buying back and retiring shares.
APR is also revising its corporate bylaws to streamline quarterly dividend announcements—an effort the company says aims to boost transparency and maximize shareholder value.
Another K-beauty player, CNC International, is set to deliver its first-ever annual dividend since its KOSDAQ debut in May 2021. At a general shareholders’ meeting today, the company is expected to approve a ₩1,000 per share payout, amounting to ₩9.99 billion—roughly 30% of its 2024 net profit.
Tonymoly, a pioneer in South Korea’s first-generation cosmetics road shop boom, will resume dividends for the first time since 2018, following years of pandemic-driven losses. The company will pay ₩120 per share, reflecting a 17% payout ratio.
“The growth of K-beauty has expanded the industry’s financial base, making higher dividends a viable—and increasingly expected—move,” said an industry official. “Investor attention is intense in this sector, and companies are responding accordingly.”
The dividend wave isn’t limited to beauty brands. Entertainment and fashion companies are also getting on board.
The exterior of K-pop giant Hybe’s headquarters in Seoul. (Image courtesy of Yonhap)
HYBE, the K-pop powerhouse behind BTS, is issuing dividends for the second consecutive year, despite recording a net loss in 2024.
The payout—₩200 per share, totaling ₩8.3 billion—is smaller than the previous year’s ₩700 per share, but higher when calculated using net profit attributable to controlling shareholders, the metric HYBE uses for its 30% return policy.
The company is also adding a special dividend, reflecting its broader commitment to shareholder returns beyond net profit performance.
Apparel brand The Nature Holdings, known for managing National Geographic’s fashion label in Korea, will pay its highest dividend since its 2020 listing: ₩500 per share. Despite a 55% drop in operating profit last year, the company said it is prioritizing shareholder value, as demonstrated by recent stock buybacks.
Even traditional consumer goods companies are ramping up. Water and air purifier maker Coway, now under Netmarble’s control, more than doubled its dividend for 2024 to ₩2,630 per share, with total payments reaching ₩189.1 billion. The firm has pledged to raise its total shareholder return ratio—including dividends and buybacks—from 20% to 40% of net profit.
Experts attribute this momentum to mounting pressure from retail shareholders and advocacy groups.
“Over the past few years, shareholders—especially small ones—have pushed harder for meaningful returns,” said Lee Chang-min, a professor at Hanyang University. “Despite recent efforts, dividend payout ratios in Korea still lag behind global standards.”
As the dividend culture deepens, smaller firms are beginning to follow suit.
“Dividends and buybacks are becoming key benchmarks for corporate governance,” said Hwang Yong-sik, a professor at Sejong University. “Even in founder-led firms, proactive shareholder returns are enhancing corporate reputation and boosting investment appeal.”
With 2025 shaping up as a pivotal year for capital markets reform, Korean startups appear increasingly aware that growth and governance must now go hand in hand.
M. H. Lee (mhlee@koreabizwire.com)
