'Cheogajip Yangnyeom Chicken' Owner Family Firm Alone Posts High Profits... Listed Company Has Low Margins [Companies at a Crossroads] Cherrybro 1

Owner-family company posts operating margins five times higher while using Cherrybro's chicken
Broiler prices and feed costs drive greater volatility in Cherrybro's operating margin

Cherry B Holdings, the holding company of the chicken franchise Cheogajip Yangnyeom Chicken and a company owned by the founder's family, has been posting high profits, while its KOSDAQ-listed affiliate Cherrybro, which supplies raw chicken, has reported relatively low profits. Market watchers point to the group's governance structure and transactions between affiliates as reasons Cherrybro is undervalued, with its price-to-book ratio (PBR) falling to around 0.3 times.

According to the Financial Supervisory Service's electronic disclosure system on November 11, Cherrybro reported consolidated revenue of KRW 405.4 billion and operating profit of KRW 28.5 billion last year, for an operating margin of 7%. Net income came to KRW 28.6 billion, representing a net margin of 7.1%.

In 2024, Cherrybro recorded revenue of KRW 382.9 billion and operating profit of KRW 2.9 billion, leaving its operating margin at 0.8%. It also posted a net loss of KRW 9 billion, swinging to a loss. In 2023, it reported revenue of KRW 399 billion, operating profit of KRW 21 billion (an operating margin of 5.3%), and net income of KRW 15 billion (a net margin of 3.5%). Over the past 10 years, its operating margin has ranged from -8% to 7%.

By contrast, Cherry B Holdings, an unlisted company and Cherrybro's largest shareholder, posted a high operating margin of around 39% last year, more than five times Cherrybro's. Its operating margin has also ranged from 11% to 16% over the past 10 years. While Cherrybro has earned relatively low profits amid fluctuations in the price of broiler chicken and the risks of poultry farming, Cherry B Holdings has consistently maintained strong results.

Founded in September 1991, Cherrybro is a broiler integration company that was listed on the KOSDAQ market in December 2017. As of 2025, its revenue consisted of broiler chickens (93.9%), merchandise (2.3%), chicks (1.6%), and feed (1.6%), among other items, and all of its sales were domestic.

Cherry B Holdings is a holding company formerly known as Hanguk Ilosam, which operated the Cheogajip Yangnyeom Chicken franchise business. After changing its name, Cherry B Holdings spun off the franchise business into a wholly owned subsidiary, Korea 153, a newly established company that took the same name as the former company.

Cherry B Holdings is currently Cherrybro's largest shareholder, with a 39.55% stake. Its largest shareholder is Kim Kangheung, the second-generation family member of the founder and Cherrybro's vice chairman and CEO, who holds a 62.59% stake. The remaining shares are held by family member Kim Hwayoung and are held as treasury shares, among others. In effect, Cherry B Holdings is a family-owned company controlled by Vice Chairman Kim Kangheung.

Cherry B Holdings and Korea 153, the company created through the spin-off, purchase most of the chicken used as an ingredient in their products from Cherrybro. As of the end of 2025, Cherry B Holdings had purchased KRW 78.3 billion worth of products from Cherrybro, accounting for about 67% of its total cost of sales.

Market watchers say Cherrybro's long-standing undervaluation stems from its governance and business structures. Its PBR (price-to-book ratio) is around 0.3 times, less than half the average for the food, beverage and tobacco sector on the KOSDAQ.

In response, a Cherrybro representative said, "Prices for transactions with Korea 153 are determined in a manner similar to that used by comparable companies in the same industry. Cherrybro is a production-focused company that handles everything from breeding stock and feed to poultry farming, slaughtering and processing. Because its results are heavily influenced by live chicken prices and feed costs, we are unable to comment on profitability comparisons with companies that have different business structures or on the results of other companies."

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