KOSPIHolding Companies009970

Youngone Holdings

₩164,500▲ 1.67%2026-10-02 close

Market Cap

₩2.1T

Turnover

₩1.5B

Volume

9,389 shares

Shares out.

13M

PER

4.6×

PBR

0.6×

EPS

₩37,150

Dividend Yield

3.85%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩6,576 per share · Prices as of the 2026-10-02 close

Report overview

OEM Momentum and Buyback Cancellations vs. the Holding-Company Discount

Strong performance-apparel OEM at core subsidiary Youngone Corporation is lifting both revenue and margins, while losses at bicycle brand SCOTT, tariff exposure and the holding-company structure sit on the other side of the scale.

1
First-half 2026 consolidated revenue was KRW 2.464tn with operating profit of KRW 353.5bn, up 12.8% and 19.8% year on year respectively, with profit growing faster than sales (per the August 2026 semi-annual report).
2
Manufacturing OEM drove the results, with rising order volumes from key customers such as Arc'teryx, VFC (The North Face) and Patagonia cited as the common driver.
3
SCOTT, the loss-making unit, grew first-half revenue and nearly halved its operating loss, though the company stated that the pace of bicycle market recovery will remain limited.
4
An additional profit-based cancellation of treasury shares equal to 5.5% of outstanding shares is planned within the year, bringing 2026 cancellations to a combined 9.5%.
5
Under the holding-company structure a large share of consolidated net profit belongs to non-controlling interests, while U.S. tariffs and production-base concentration require ongoing monitoring.

Business structure

Youngone Holdings has served as a holding company since spinning off its operating arm, Youngone Corporation, in 2009, and most of its consolidated results come from that subsidiary.

Youngone Corporation produces and exports apparel and footwear on an OEM basis in Bangladesh and Vietnam, and has invested in fabric facilities in both countries to make its own textiles for performance knitwear.

It manufactures outdoor and sports apparel, footwear and backpacks for some 40 overseas buyers including The North Face, lululemon, Patagonia and Arc'teryx, and it also runs brand distribution and logistics after acquiring Outdoor Research in 2014 and a majority stake in Swiss premium bicycle brand SCOTT in 2015.

The business splits broadly into manufacturing OEM and SCOTT-centered brand distribution.

On a pre-consolidation-adjustment basis in the first half of 2026, manufacturing OEM revenue was KRW 2.741tn, up 17.97% from KRW 2.3235tn a year earlier, with operating profit of KRW 318.1bn, up 16.06%; OEM accounted for 68.86% of the sum of segment revenue (per August 2026 filings).

Over the same period SCOTT segment revenue rose 15.13% to KRW 606.3bn while its operating loss narrowed 48.69% from KRW 54.6bn to KRW 28.0bn. Production is spread across overseas entities in Bangladesh, Vietnam, El Salvador and Ethiopia, with Bangladesh accounting for roughly 70%.

Domestically it is compared with peers such as Hansae (Vietnam, Guatemala) and Sae-A Trading (Indonesia, Vietnam, Costa Rica), but its customer mix is skewed toward outdoor and performance apparel.

Bangladesh's status as a beneficiary of Europe's Generalized System of Preferences has historically been a tariff advantage for Europe-bound shipments.

Earnings trend

Quarterly revenue · Operating profit

₩1.2T₩162.6B25Q2₩1.3T₩196.6B25Q3₩1.4T₩243.8B25Q4₩1.1T₩157.8B26Q1₩1.4T₩195.7B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩4.5T₩1T2022₩4.4T₩872.6B2023₩4.3T₩517B2024₩4.9T₩735.5B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩1.2T	₩162.6B	13.8%
2025Q3	₩1.3T	₩196.6B	15.6%
2025Q4	₩1.4T	₩243.8B	16.8%
2026Q1	₩1.1T	₩157.8B	14.6%
2026Q2	₩1.4T	₩195.7B	14.1%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩4.5T	₩1T	₩440.8B	22.1%	21.5%	37.7%
2023	₩4.4T	₩872.6B	₩371.7B	20.0%	15.8%	39.3%
2024	₩4.3T	₩517B	₩334B	12.0%	12.3%	31.9%
2025	₩4.9T	₩735.5B	₩367.7B	15.0%	12.2%	32.3%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

On an annual basis, margins compressed from 2022 revenue of KRW 4.5339tn and operating profit of KRW 1.0022tn (22.1% margin) through 2023 (KRW 4.3555tn, KRW 872.6bn, 20.0%) to 2024 (KRW 4.306tn, KRW 517.0bn, 12.0%), then rebounded in 2025 to revenue of KRW 4.895tn and operating profit of KRW 735.5bn (15.0%).

Net profit attributable to owners was KRW 367.7bn in 2025 versus total net profit of KRW 606.5bn, reflecting the large non-controlling share typical of a holding structure (non-controlling equity of KRW 2.2709tn versus owners' equity of KRW 3.0152tn at end-2025).

Quarterly, revenue and operating profit improved from KRW 1.1779tn / KRW 162.6bn in 2Q25 to KRW 1.2624tn / KRW 196.6bn in 3Q25 and KRW 1.449tn / KRW 243.8bn in 4Q25, followed by KRW 1.0786tn / KRW 157.8bn in 1Q26 and KRW 1.3854tn / KRW 195.7bn in 2Q26.

In 2Q26 revenue rose 17.6% and operating profit 20.4% year on year, with profit growth outpacing sales growth. The quarterly operating margin climbed from 13.8% in 2Q25 to 16.8% in 4Q25 before settling near 14.1% in 2Q26, moving with seasonality and product mix.

Net profit attributable to owners rose from KRW 65.0bn in 2Q25 to KRW 126.4bn in 4Q25, then KRW 96.8bn in 1Q26 and KRW 101.3bn in 2Q26. Management attributed the growth to continued strength in the OEM business at subsidiary Youngone Corporation.

On cash flow, 2025 operating cash flow of KRW 540.7bn trailed operating profit of KRW 735.5bn, consistent with working-capital needs from expansion, and the rapid increase in trade receivables during that expansion has been flagged as a burden.

The balance sheet stayed conservative with a 32.3% debt-to-equity ratio at end-2025, and as of end-June 2026 cash and equivalents of KRW 1.0416tn plus short-term financial instruments of KRW 987.9bn, less total borrowings of KRW 427.8bn, left net cash of about KRW 1.6018tn.

Industry analysis

The global apparel OEM cycle entered a recovery phase after brand-side inventory destocking in 2022-2023. The consensus reading is that manufacturing OEM revenue grew on order recovery from the second half of 2024, while the SCOTT segment suffered falling sales and excess inventory amid weak global bicycle demand.

The quality of the recovery varies by brand: Arc'teryx, once a single-digit share of revenue, has risen to roughly 10-15% and become a pillar of earnings stability.

In August 2026 Daishin Securities and NH Investment & Securities both pointed to a broadening global sports and outdoor customer base, noting that alongside Arc'teryx growth, sales to VFC and Patagonia also rose at double-digit rates. U.S. tariffs, by contrast, remain a structural industry variable.

Commentary has repeatedly noted that while tariffs are nominally paid by U.S. importers, in practice brands pass costs to OEM vendors through price-cut demands or smaller orders, squeezing profitability and volumes at the same time.

Unlike peers that expanded Central American capacity to secure duty-free U.S. access, Youngone has kept Bangladesh as its principal production base with little sign of major expansion at its El Salvador entity, giving it a different regional footprint.

For bicycles the question is whether the cycle has bottomed: analysts noted that SCOTT struggled through the global downturn but is gradually improving profitability by controlling discount sales.

Outlook

The direction confirmed by the company is continued OEM-led growth alongside a gradual normalization at SCOTT.

In its quarterly report Youngone said the recovery in global bicycle markets including Europe has been slower than expected, that SCOTT's operating environment will remain difficult for some time, and that the pace of market and earnings recovery in 2026 will be limited.

Management said it is working on SCOTT inventory normalization while developing products aligned with consumer demand and rationalizing stock-keeping units.

Reports in July 2026 indicated a planned USD 100mn investment covering SCOTT product innovation, digital marketing, channel expansion and diversification into apparel and footwear.

On the production side, the company has outlined efficiency gains via capacity additions, smart-factory conversion and automation, plus solar generation capacity rising from 58MWp at end-2025 to 71MWp in 2026 and 100MWp by 2030.

Shareholder returns have stepped up: after cancelling 1% of outstanding shares in May 2025 and 4% in May 2026, the company plans to cancel a further 712,460 treasury shares (5.5% of outstanding shares) within this year, and intends to give priority consideration to cancelling the remaining 636,459 treasury shares during 2027.

Observers argue that operating multiple production bases provides a buffer against tariff, logistics and labor cost swings, and that since global brands weigh supply-chain stability and delivery capability when selecting vendors, this infrastructure is an advantage in winning new orders.

At the subsidiary level, however, Youngone Corporation raised its consolidated dividend payout target for 2027 from 25% to 30% and added a plan to buy back KRW 50bn of its own shares by 2027, but did not include a share-cancellation plan.

Valuation

PER

4.6×

PBR

0.6×

ROE

14.5%

EPS

₩37,150

BPS

₩280,531

Dividend per share

₩6,576

The valuation debate here centers less on the absolute level of profit than on discounts arising from the holding-company structure.

Because a large portion of consolidated net profit accrues to non-controlling interests, earnings multiples computed on owner-attributable profit follow a different path from those of the operating company, Youngone Corporation.

The share price sits below book value per share, and the earnings multiple is on the low side relative to the broader Korean market, which is generally read as reflecting the customary holding-company discount together with SCOTT's loss history.

The dividend yield is above the KOSPI market average, and the company cancelled 1% of its treasury shares under its medium-to-long-term return policy and set the 2025 annual dividend as a combination of interim and year-end payments.

NH Investment & Securities said in August 2026 that SCOTT inventory normalization and the upgraded dividend policy should gradually improve factors that had acted as valuation discounts.

For reference, on the subsidiary Youngone Corporation, Daishin Securities said on August 18, 2026 that it maintained a target price of KRW 140,000 and a Buy rating — an opinion on the operating company, not the holding company.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Order Stability Built on the Customer Portfolio

The company has secured globally recognized brands such as lululemon, Engelbert Strauss and Patagonia, and is seen as having built a relatively recession-resilient portfolio at a time when rival OEMs struggle with softening global demand.

Eugene Investment & Securities said in a May 2026 report that Arc'teryx accounts for a mid-teens share of total orders and viewed the addition of global running brand On as a new customer positively. Customer diversification works to reduce single-brand dependence. That said, order flow still fluctuates with each brand's own sales trends.

Rising Utilization and Fixed-Cost Leverage

In 2Q26, revenue rose 17.6% year on year while operating profit rose 20.4%, with profit growth outpacing top-line growth. KB Securities said in a June 2026 report that in OEM, higher volumes dilute fixed costs and materially improve operating margins.

Second-quarter 2026 OEM revenue was estimated to have grown 22-23% year on year in won terms and 14-15% in dollar terms, with OEM segment operating profit up 18%. Volume growth holding up even excluding currency effects is a metric tied to the durability of margin improvement.

Net-Cash-Backed Expansion of Shareholder Returns

After spending KRW 105.9bn on property and equipment and paying KRW 130.3bn in dividends in the first half of 2026, the company still held roughly KRW 1.6018tn in net cash. With an additional cancellation equal to 5.5% of outstanding shares planned within the year, total 2026 cancellations will reach 9.5%.

Under its value-up plan, the company maintains a policy of keeping the payout ratio at around 50% of separate-basis net profit. If profit growth continues, the pool available for returns widens with it.

Bear factors

Uncertain Timeline for SCOTT's Normalization

The company itself expects a full bicycle-market recovery to take time and has said the pace of market and earnings recovery will remain limited in 2026. Daishin Securities said in August 2026 that SCOTT again posted an operating loss in the second quarter and that most of it stemmed from inventory disposal.

The loss is narrowing, but no official timeline for a return to profit has been given. If European consumption and the inventory cycle stay depressed longer than expected, consolidated margins face continued pressure.

Tariffs and Production Concentration

With the U.S. signaling reciprocal tariff rates above 30% for countries such as Vietnam, Bangladesh and Indonesia, commentary has highlighted that 70% of Youngone's production facilities are concentrated in Bangladesh.

Some assessments note that a footprint concentrated in Southeast Asia leaves fewer options than peers with alternative bases. A structural vulnerability also remains: if brands pass tariff costs down through price cuts or smaller orders, the OEM vendor absorbs the shock. Tariff rates and negotiation outcomes are external variables largely outside the company's control.

Holding Structure and Governance Agenda

Because non-controlling interests take a large slice of consolidated net profit, owner-attributable earnings do not fully capture improvements at the operating company. As of the first half of 2026, compliance with core corporate-governance indicators stood at 66.7%, short of the company's 80% target.

In a June 2026 open letter, Quad Asset Management demanded not only larger shareholder returns but also the unwinding of unreasonable related-party transactions and a revamp of executive compensation, yet the revised value-up plan covered only dividends and treasury shares. How the governance discussion is resolved bears directly on the holding-company discount debate.

Risk factors

FX and Costs

With a heavily dollar-denominated revenue base, a stronger won is a headwind for won-converted sales and margins. DB Securities said in August 2026 that dollar revenue growth in the OEM division and favorable currency effects contributed to profitability gains.

Eugene Investment said in May 2026 that although cost increases were expected in the second quarter, a rising share of higher-margin customer orders could largely offset them. If currencies move the other way or labor and logistics costs rise, the margin improvement could narrow.

Inventory and Working Capital

Top-line expansion comes with receivable and inventory burdens. Inventories rose 9.81% from KRW 1.462tn at end-2025 to KRW 1.6054tn at end-June 2026, a slower pace than first-half revenue growth, so the burden did not increase sharply.

NH Investment & Securities noted in July 2026 that OEM inventories hit a record KRW 817.6bn at the end of the first quarter, reading this as support for solid revenue growth. Should orders slow, however, the same inventory can quickly turn into valuation losses and cash-flow pressure.

Customer Concentration

A meaningful part of growth rests on volume gains at specific brands. KB Securities said in June 2026 that Arc'teryx orders are concentrated at Youngone and that parent Amer Sports raised its expected 2026 revenue growth for the technical apparel segment from 18-20% to 22-24%.

By contrast, existing customer lululemon's strong growth was projected to moderate somewhat. Weak sales or a change in ordering policy at a single brand can translate directly into quarterly earnings volatility.

What to watch next

October to mid-November 2026
Filing of the 3Q26 quarterly report. The point to check is whether the record quarterly revenue and operating profit pace seen in 4Q25 carries into the second half, alongside the OEM operating margin and the extent of SCOTT's loss reduction.
During 4Q 2026 (within the year)
Board resolution and execution filings for the additional profit-based cancellation of 712,460 treasury shares, equal to 5.5% of outstanding shares. Watch whether it proceeds as scheduled and whether the timing and share count match the disclosures.
November to December 2026
Quarterly results and guidance from key customer brands. Since Arc'teryx parent Amer Sports had raised its technical apparel growth outlook, whether that outlook holds serves as leading information on OEM order intensity.
February to March 2027
Confirmed full-year 2026 results, the year-end dividend, and an update on value-up plan execution. This is when whether the remaining 636,459 treasury shares are cancelled in 2027 and the size of the dividend are decided together.
Ongoing, at each tariff and trade announcement
U.S. tariff rates applied to apparel from Bangladesh and Vietnam, and how brands share the cost. Whether tariff costs are passed to OEM vendors via price cuts or smaller orders directly affects margins.

Overall view

Youngone Holdings' recent results rest on strong performance-apparel OEM at subsidiary Youngone Corporation. Annually, the operating margin recovered from a compressed 12.0% in 2024 to 15.0% in 2025, and in 2Q26 revenue rose 17.6% year on year while operating profit rose 20.4%, with profit outpacing the top line.

SCOTT, previously the loss-making unit, grew first-half revenue and narrowed its operating loss from KRW 54.6bn to KRW 28.0bn, yet the company projected that the bicycle market's recovery pace will remain limited in 2026.

Financially, a 32.3% debt-to-equity ratio at end-2025 and net cash above the trillion-won mark are confirmed, and a further cancellation of treasury shares equal to 5.5% of outstanding shares is scheduled within the year.

On the other side sit production concentrated in Bangladesh, U.S. tariffs, brands' practice of passing on costs, the large non-controlling share inherent to the holding structure, and governance indicators below target.

In short, the bullish case is earnings improvement built on the customer portfolio and utilization; the bearish case is tariffs, the bicycle cycle and structural discounts.

Upcoming quarterly results, execution of the share cancellation, and guidance from key customer brands will be the evidence for which side of that scale grows heavier. This report is for informational purposes and contains no buy or sell recommendation on any security.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.