Sonokong’s Half-Year Revenue Soars to 81.8 Billion Won...Transformation from Toy Company to Mobility and AI Enterprise

Toy and character company Sonokong has significantly expanded its business size by focusing on the automobile industry. As the automobile sales business, which was integrated last year, is now fully reflected in the results, first-half revenue soared to more than triple that of the previous year. However, despite this growth in scale, operating losses continue, pointing to the need to secure profitability in new businesses such as mobility in the future.

On August 14, Sonokong announced that its consolidated revenue for the first half of this year reached 81.8 billion won. This represents a 249% increase from 23.4 billion won during the same period last year. This figure corresponds to 84% of last year’s annual revenue of 97.2 billion won.

The automobile business was the main driver of performance. Automobile sales from Klasse Auto, the official Volkswagen Korea dealer that was included in the consolidated results last year, generated 54.1 billion won in the first half alone. This amounts to 88% of last year’s annual automobile sales revenue of 61.4 billion won.

The used car business also grew. Used car sales revenue reached 2.5 billion won in the first half, already surpassing last year's annual figure of 900 million won. Sonokong Rent-a-Car’s rental income of 1 billion won and Seo-Seoul Development’s rental income of 300 million won were both included in the consolidated results for the first time this year.

With the new establishments of Seo-Seoul Development and Son Investment last year, coupled with the addition of Sonokong Rent-a-Car and LUPAP, the expanded business portfolio is now contributing to results in earnest this year.

Profitability remains a challenge. The operating loss in the first half was 3.4 billion won, widening from 1.9 billion won in the same period last year. However, the operating loss ratio to sales narrowed from 7.9% to 4.1%. The increase in revenue led to a relatively lighter burden of fixed costs.

The size of net loss was significantly reduced. The first-half consolidated net loss was 680 million won, an 87% decrease from 5.022 billion won in the same period last year. Net loss attributable to controlling interests also dropped significantly to 600 million won from 5.08 billion won a year earlier.

The financial structure also improved. Total liabilities at the end of the first half stood at 60.6 billion won, down 10 billion won from the end of last year, and the debt ratio declined from 143.1% to 124.4%. The current ratio remained at a stable level of 103.1%.

Sonokong is pushing for further expansion in the mobility sector, leveraging its automobile business. The company is reviewing used car distribution and auctions, as well as overseas exports, with Klasse Auto at the center. There are also plans to promote rental car and installment financing-linked businesses utilizing Sonokong Rent-a-Car.

Artificial intelligence (AI) and robotics are also being developed as new growth pillars. In May, Sonokong formed a strategic partnership with Azibot, followed by a domestic exclusive distribution agreement for the R2E AI Wellness Robot in July.

The K-IP business through 100% subsidiary LUPAP will also be expanded. The company is pursuing the ‘K-IP Discovery Project’ in collaboration with domestic art toy creators and plans to validate its business potential through offline exhibitions and pop-ups. Real estate development and investment, through Seo-Seoul Development and Son Investment, will also become new growth drivers.

Hyunil Cha, CEO of Sonokong, said, “The business diversification we completed last year has been leading to revenue growth since the beginning of this year. As the mobility business gains traction, we are steadily preparing new ventures such as AI wellness and the K-IP platform.”

He added, “The relatively slow improvement in operating profitability compared to sales growth is something the company takes seriously. Together with stabilizing our financial structure, we will focus on improving profitability from the second half onward.”

This content was produced with the assistance of AI translation services.