KOSDAQRetail & Consumer025870

Silla Sg

₩1,059 0.00%2026-10-02 close

Market Cap

₩4.2B

Turnover

₩0

Volume

0 shares

Shares out.

PER

—

PBR

0.3×

EPS

-₩450

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

Value-Up Execution Begins Amid Earnings Volatility

Silla SG is executing its value-up plan by adding a new meat sausage business atop its stable fish sausage and seafood distribution base, but quarterly earnings continue to swing between profit and loss.

1
2025 consolidated revenue of KRW 70.0bn with an operating loss of KRW 1.56bn, swinging from prior-year profit
2
2Q26 operating profit of KRW 0.80bn and owner net profit of KRW 0.54bn, returning to profitability
3
Following the June 2026 'Value-Up Plan 2026' disclosure, the company entered meat sausage manufacturing expecting about KRW 6bn in annual revenue
4
High dependence on OEM supply to CJ CheilJedang creates a single-customer structure risk
5
As a Silla Group affiliate (majority owner Silla Holdings), the company has no dividend history and a debt ratio in the 200% range

Business structure

Silla SG was founded in 1977 and listed on KOSDAQ in 1995 as a food manufacturing and distribution company, with Silla Holdings as its majority owner within the Silla Group family of listed affiliates that also includes Silla International, Wonil Special Steel, and Silla Textile.

Its core business consists of two pillars: fish sausage and other seafood processed food manufacturing, and seafood/meat (beef, pork) wholesale distribution. Since 2000, the company has supplied fish sausage to CJ CheilJedang under an OEM arrangement, maintaining a production system of roughly 4,500 tons annually.

It sells canned whelk under its own 'Dongpyo' brand, with the whelk canning business cited as maintaining production of around 1.1 million cans per year as a stable revenue source.

The company states it has secured HACCP certification and EU export processing facility certification, and operates a food research institute to build quality competitiveness.

In June 2026 the company entered a new business producing CJ CheilJedang's meat sausage products such as 'Round SPAM' and 'Big Sausage,' taking over some manufacturing equipment from CJ CheilJedang to minimize initial investment while leveraging existing infrastructure.

The company expects this new business to generate about KRW 6 billion in additional annual revenue, and stated that combined with existing fish sausage (about KRW 25 billion) and whelk business (about KRW 5 billion), total manufacturing revenue is projected to expand to roughly KRW 36 billion annually.

The heavy reliance on OEM supply to CJ CheilJedang means the relationship with this single customer has a significant bearing on results.

Earnings trend

Quarterly revenue · Operating profit

₩17.9B-₩400M25Q2₩20.7B-₩44,272,18825Q3₩15B-₩500M25Q4₩17.6B-₩600M26Q1₩20B₩800M26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩73.4B₩2.3B2022₩88.4B₩1.7B2023₩85.6B₩1.1B2024₩70B-₩1.6B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩17.9B	-₩400M	−2.5%
2025Q3	₩20.7B	-₩44,272,188	−0.2%
2025Q4	₩15B	-₩500M	−3.5%
2026Q1	₩17.6B	-₩600M	−3.3%
2026Q2	₩20B	₩800M	4.0%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩73.4B	₩2.3B	₩1.1B	3.1%	6.4%	170.7%
2023	₩88.4B	₩1.7B	₩300M	1.9%	1.7%	182.6%
2024	₩85.6B	₩1.1B	₩100M	1.3%	0.7%	164.1%
2025	₩70B	-₩1.6B	-₩3.3B	−2.2%	−23.6%	219.8%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23

Earnings analysis

Annual revenue rose from KRW 73.4bn in 2022 to KRW 88.4bn in 2023, plateaued at KRW 85.6bn in 2024, then declined to KRW 70.0bn in 2025. Operating profit shrank each year from KRW 2.25bn in 2022, to KRW 1.69bn in 2023, to KRW 1.15bn in 2024, before turning to an operating loss of KRW 1.56bn in 2025.

Owner net profit likewise contracted sharply from KRW 1.13bn in 2022 to KRW 0.30bn in 2023 and KRW 0.12bn in 2024, before recording a net loss of KRW 3.34bn in 2025. Operating margin fell from 3.1% in 2022 to -2.2% in 2025, reflecting a clear profitability deterioration trend.

On a quarterly basis, the company posted operating losses of KRW 0.44bn in 2Q25, KRW 0.04bn in 3Q25, and KRW 0.53bn in 4Q25 — three consecutive loss-making quarters — followed by another operating loss of KRW 0.58bn in 1Q26.

However, 2Q26 saw revenue of KRW 20.0bn, operating profit of KRW 0.80bn, and owner net profit of KRW 0.54bn, marking a return to profit after five straight quarters of loss.

This turnaround came even as the trailing four-quarter (3Q25–2Q26) owner net profit total remained a loss of KRW 1.80bn, and while the new meat sausage business and portfolio restructuring may have contributed, a single profitable quarter is not sufficient to confirm a sustained trend reversal.

Negative operating cash flow of KRW -1.27bn in 2023 and KRW -2.10bn in 2025 also point to weakened cash generation during the profit decline period.

Industry analysis

The processed food and seafood distribution sector that Silla SG operates in is sensitive to domestic consumption trends, raw material (seafood, meat) prices, and currency fluctuations.

Market assessments note that domestic political risk, declining catch volumes, a high exchange rate, and a food market slowdown have continued to weigh on domestic demand, widening market volatility.

At the same time, other views point to changing consumption trends driven by continued growth in online sales and diverse home meal replacement (HMR) product launches, with e-commerce market activation expected to support growth in the imported chilled meat market.

Low-priced processed foods such as fish sausage and canned goods have a degree of defensive character, but as a small-to-mid-sized processor lacking the brand power and distribution scale of major food companies, the company has adopted a business model of supplying under OEM arrangements to large brands such as CJ CheilJedang.

This provides stable volume but also comes with structurally limited pricing power.

The Silla Group holds a diverse set of listed affiliates spanning distant industries — Silla International (deep-sea fishing), Wonil Special Steel, and Silla Textile (real estate leasing) — meaning Silla SG's business direction moves in tandem with the group's broader value-up and portfolio restructuring strategy.

Outlook

The company disclosed its 'Value-Up Plan 2026' on June 16, 2026, presenting four core initiatives: business portfolio upgrading, establishing a profitability-focused operating system, securing mid-to-long-term growth foundations, and expanding investor communication.

As the first execution case under this plan, it announced entry into meat sausage manufacturing on June 19, stating that related facility construction had been completed and production had already begun.

The company outlined a direction of diversifying its sausage product lineup and achieving early results improvement through swift stabilization of the new business, alongside discovering new growth drivers and improving low-profit business structures.

It also stated a mid-to-long-term concept of strengthening its growth foundation through expanded processing operations, vertical integration, and overseas market entry.

According to Korea Exchange data, Silla SG was one of 12 companies that newly disclosed a value-up plan in June 2026, part of a cumulative total of 394 KOSDAQ-listed companies participating in such disclosures.

Under its enhanced investor communication policy, the company also signaled plans to expand regular IR activities. Whether these plans translate into actual revenue and profit improvement, however, remains something to be confirmed through future quarterly results and the new business's revenue contribution.

Valuation

PER

—

PBR

0.3×

ROE

-11.8%

EPS

-₩450

BPS

₩3,596

Dividend per share

₩0

Silla SG has no history of dividend payments, so dividend-related metrics remain below sector averages.

In terms of the price-to-book ratio, the stock appears to trade at a discount to net asset value, a pattern that can be attributed to the reduction in shareholders' equity following the 2025 net loss combined with several years of declining earnings.

Based on the most recently confirmed fiscal year, however, the net loss makes a conventional earnings multiple (P/E) difficult to calculate, and the trailing four-quarter total also remains in loss territory, warranting caution when interpreting earnings-based valuation metrics.

Whether the 2Q26 return to profit proves sustained could be a key point to watch for any recovery in earnings-based indicators.

As a small-cap KOSDAQ processed food and distribution company with limited trading volume and liquidity, interpretation of valuation metrics warrants comparison with similarly sized peers in the same sector.

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 2026-08-23

Bull factors

Value-Up Plan Execution Underway

Following its June 2026 disclosure of 'Value-Up Plan 2026,' the company entered the meat sausage business as its first execution case and has already begun production.

The company projects that combined with existing fish sausage and whelk businesses, total manufacturing revenue will expand to roughly KRW 36 billion annually. Minimizing initial investment burden by taking over equipment from CJ CheilJedang is also a factor that can be viewed favorably in terms of execution speed.

Return to Profit in 2Q26

After four consecutive quarters of operating losses from 2Q25 through 1Q26, 2Q26 showed a clear improvement with revenue of KRW 20.0bn, operating profit of KRW 0.80bn, and owner net profit of KRW 0.54bn. This suggests the new business revenue contribution and cost structure improvements may have played a role. Whether this trend continues in coming quarters is a key point to watch.

Stable Large-Customer Base

Building on a stable OEM supply relationship with CJ CheilJedang for fish sausage since 2000, the company has recently expanded its supply items to include meat sausage. This structure of securing stable volume demand from a major food company enhances revenue predictability for a small-to-mid-sized processor.

Bear factors

Full-Year Loss in 2025

Consolidated revenue in 2025 fell to KRW 70.0bn from KRW 85.6bn the prior year, while operating profit turned negative at KRW -1.56bn and net profit at KRW -3.34bn. Operating margin also declined from 3.1% in 2022 to -2.2% in 2025, continuing a multi-year profitability deterioration trend. It is still premature to conclude this trend has fully reversed based on a single profitable quarter.

High Single-Customer Dependence

Both fish sausage and the new meat sausage business operate under an OEM supply structure to CJ CheilJedang, meaning changes in trading terms with this specific major customer could directly affect results. This carries the structural weakness of limited pricing negotiation power alongside the benefit of stable volume.

Elevated Debt Ratio and No Dividend

The 2025 debt ratio rose to 219.8%, higher than the 164-183% range seen from 2022 to 2024, while operating cash flow also turned to KRW -2.10bn in 2025, showing weakened cash generation alongside deteriorating earnings. The company has no history of dividend payments, limiting appeal from a shareholder return perspective.

Risk factors

Customer Concentration Risk

Revenue from both fish and meat sausage is concentrated in OEM supply to CJ CheilJedang, meaning any adjustment in that customer's order volume or contract terms could significantly affect results. The new meat sausage business is also an expansion toward the same customer, so customer diversification remains limited.

Raw Material and FX Volatility

Industry analysis has pointed to declining seafood catch volumes and a high exchange rate environment as potential burdens on raw material procurement costs. The meat segment is also exposed to international commodity prices and currency fluctuations, meaning cost-side volatility could affect margins.

New Business Ramp-Up Uncertainty

The new meat sausage business is at an early stage having started production in June 2026, and whether it will successfully ramp up to its targeted KRW 6 billion annual revenue and its profitability contribution still require further confirmation.

The business portfolio upgrading and low-profit business structure improvements outlined in the value-up plan may take time to translate into actual results.

What to watch next

Around November 2026
The 3Q26 earnings disclosure should be checked to see whether the 2Q26 return to profit continues and whether the meat sausage business's revenue contribution begins to materialize.
Q4 2026 to early 2027
This is a point to check whether the meat sausage business achieves its targeted annual revenue (about KRW 6 billion) and whether overall manufacturing segment revenue expands toward the roughly KRW 36 billion target.
From H2 2026 onward
It is worth checking whether additional IR materials or disclosures related to mid-to-long-term business restructuring (vertical integration, overseas expansion) emerge under the enhanced investor communication policy outlined in 'Value-Up Plan 2026.'
Before March 2027
Once the confirmed full-year 2026 results (including 4Q) are disclosed, it will be a final checkpoint to see whether the annual loss trend continues or reverses into profit.

Overall view

Silla SG is a food processing and distribution company founded in 1977, currently executing a Silla Group-wide value-up plan by adding a new meat sausage business in June 2026 atop its stable fish sausage and whelk canning business base.

Financially, earnings have steadily declined since 2022, culminating in a full-year operating loss and net loss in 2025, and the company posted four consecutive quarters of operating losses from 2Q25 through 1Q26 before reversing to profit across revenue, operating income, and net income in 2Q26.

Whether this turnaround reflects the new business contribution and portfolio restructuring, or is a temporary phenomenon, requires further confirmation through upcoming quarterly results.

High OEM dependence on CJ CheilJedang, a rising debt ratio, weakened cash flow, and the absence of dividends remain structural characteristics worth continued attention.

The company has outlined a direction of portfolio upgrading, profitability-focused management, and expanded investor communication, but whether this translates into actual revenue and earnings growth remains to be seen over time.

Ahead of any investment decision, it is necessary to continuously monitor upcoming quarterly disclosures, the new business's revenue contribution, and the progress of group-wide business restructuring.

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.