KOSPIHolding Companies027410

BGF

₩3,705▲ 0.27%2026-10-02 close

Market Cap

₩356.1B

Turnover

₩200M

Volume

40,000 shares

Shares out.

95.7M

PER

5.6×

PBR

0.2×

EPS

₩693

Dividend Yield

3.35%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩130 per share · Prices as of the 2026-10-02 close

Report overview

CU Rebound Continues, Holdco Net Income Stays Volatile

Core subsidiary BGF Retail (CU) posted a clear operating recovery, yet holding company BGF's net income attributable to owners actually declined in 2025 despite higher revenue and operating profit.

1
2025 consolidated revenue reached KRW 469.5bn (+8.2% YoY) and operating profit KRW 61.2bn (+10.8%), but owners' net income fell to KRW 59.1bn from KRW 92.1bn a year earlier
2
The debt ratio edged up from 11.6% in 2022 to 18.5% in 2025, remaining low and indicating continued balance-sheet stability
3
Results over the latest four quarters (2025Q3 operating profit of KRW 26.9bn down to 2026Q2's KRW 13.6bn) show clear seasonal swings between peak and off-peak periods
4
As a holding company, equity-method gains from stakes in BGF Retail (about 30%) and BGF Ecomaterials, along with investment-asset impairment testing, are the key swing factors in net income
5
Expansion of the materials/chemistry segment (BGF Ecomaterials group) is proceeding alongside a reshuffling of retail-affiliate structures

Business structure

BGF Co., Ltd. (027410) is a pure holding company of the BGF Group founded in 1994, recognizing performance through equity investments and dividends from subsidiaries rather than direct sales.

Its largest subsidiary is BGF Retail, operator of the CU convenience store chain, in which the holding company holds roughly a 30% stake and is the largest shareholder.

The second pillar is BGF Ecomaterials, which produces high-functionality polymer chips, automotive interior materials, and semiconductor materials including anhydrous hydrofluoric acid, in which the holding company owns more than 65% and has expanded into semiconductor materials through subsidiaries KNW and Fluorine Korea.

Smaller affiliates such as BGF Ecosolution (plastic recycling) and BGF Humannet (staffing services) also sit under the holding company.

BGF Networks, formerly held directly by the parent and responsible for advertising, delivery, and e-commerce, was folded into BGF Retail as a subsidiary in a 2024 governance reorganization that clarified the separation between the retail and materials/chemistry portfolios.

That reorganization brought a substantial cash inflow to the holding company, much of which was redirected into materials-segment investment such as a rights offering for BGF Ecomaterials.

Under the current governance structure, elder son Vice Chairman Hong Jung-kook leads the holding company and the retail segment (BGF Retail), while younger son President Hong Jung-hyuk leads the materials/chemistry segment (BGF Ecomaterials).

Because of this structure, the holding company's results are directly tied to subsidiaries' operating performance, equity-method gains and losses, and the movement of capital and equity stakes among affiliates.

Earnings trend

Quarterly revenue · Operating profit

₩123B₩17.3B25Q2₩128.5B₩26.9B25Q3₩112.1B₩11.8B25Q4₩104.9B₩8.5B26Q1₩123.6B₩13.6B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩435B₩61.2B2022₩443.2B₩70.5B2023₩434.1B₩55.2B2024₩469.5B₩61.2B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩123B	₩17.3B	14.1%
2025Q3	₩128.5B	₩26.9B	20.9%
2025Q4	₩112.1B	₩11.8B	10.6%
2026Q1	₩104.9B	₩8.5B	8.1%
2026Q2	₩123.6B	₩13.6B	11.0%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩435B	₩61.2B	₩23.6B	14.1%	1.5%	11.6%
2023	₩443.2B	₩70.5B	₩77.8B	15.9%	4.7%	14.2%
2024	₩434.1B	₩55.2B	₩92.1B	12.7%	5.3%	16.1%
2025	₩469.5B	₩61.2B	₩59.1B	13.0%	3.3%	18.5%

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

BGF's consolidated revenue moved from KRW 435.0bn in 2022, to KRW 443.2bn in 2023, KRW 434.1bn in 2024, and KRW 469.5bn in 2025, showing a clear rebound in the most recent year.

Operating profit rose from KRW 61.2bn in 2022 to KRW 70.5bn in 2023, fell to KRW 55.2bn in 2024, then recovered to KRW 61.2bn in 2025, with the operating margin fluctuating at 14.1%, 15.9%, 12.7%, and 13.0% over the same years.

Net income attributable to owners, however, rose sharply from KRW 23.6bn in 2022 to KRW 77.8bn in 2023 and KRW 92.1bn in 2024, then declined to KRW 59.1bn in 2025 — moving in the opposite direction from revenue and operating profit, suggesting non-operating factors tied to equity-method accounting and investment assets, rather than core operations, drove the swing.

On a quarterly basis, results improved from revenue of KRW 123.0bn, operating profit of KRW 17.3bn, and owners' net income of KRW 14.9bn in 2025Q2 to a much stronger peak-season 2025Q3, with revenue of KRW 128.5bn, operating profit of KRW 26.9bn (margin near 20.9%), and net income of KRW 26.1bn.

Results then eased in the off-season 2025Q4 (revenue KRW 112.1bn, operating profit KRW 11.8bn, net income KRW 13.2bn) and 2026Q1 (revenue KRW 104.9bn, operating profit KRW 8.5bn, net income KRW 9.8bn), before recovering again in 2026Q2 to revenue of KRW 123.6bn, operating profit of KRW 13.6bn, and net income of KRW 17.3bn, reflecting a seasonal pattern.

Cumulative owners' net income over the latest four quarters (2025Q3-2026Q2) was KRW 66.3bn, showing sizable quarter-to-quarter variability relative to the annual figures.

Equity steadily grew from KRW 1,736.5bn in 2022 to KRW 2,022.3bn in 2025, and the debt ratio rose gently from 11.6% (2022) to 14.2% (2023), 16.1% (2024), and 18.5% (2025) while remaining low overall.

Operating cash flow, only KRW 0.2bn in 2022, improved substantially to KRW 70.3bn in 2023, KRW 49.2bn in 2024, and KRW 52.7bn in 2025, pointing to a more stabilized cash-generation profile.

Industry analysis

Korea's convenience store industry went through store-network rationalization in 2024-2025 to resolve oversaturation, shifting emphasis from quantitative to qualitative growth, and a recovery in same-store sales growth has been emerging through 2026.

BGF Retail posted consolidated revenue of KRW 2.1204 trillion in 2026 Q1 (+5.2% year-on-year) and operating profit of KRW 38.1bn (+68.6%), with favorable weather and improving consumer sentiment cited as driving a same-store sales growth recovery of +2.7% (as reported by Financial Today, dated May 7, 2026).

In Q2, additional tailwinds from an early heat wave and rising foreign-visitor spending pushed preliminary revenue to KRW 2.4268 trillion (+6.0%) and operating profit to KRW 84.9bn (+22.3%), according to the company's preliminary disclosure (as reported by Money Today and Insight, dated August 6-7, 2026, preliminary figures).

Compared with rival GS Retail, BGF Retail's Q1 2026 revenue was somewhat smaller, but its convenience-store-only profitability was notably higher; CU generated roughly double GS25's operating profit despite only a KRW 34.1bn revenue gap (as reported by Smart Today, dated May 11, 2026).

BGF Retail has laid out a value-up plan targeting revenue above KRW 10 trillion and operating profit above KRW 300bn by 2028, with progress as of early 2026 cited at about 90.6% of the revenue target and 84.6% of the operating-profit target (as reported by Smart Today, dated May 11, 2026).

In the materials/chemistry segment, capacity expansion for specialty chemicals such as anhydrous hydrofluoric acid is being pursued to meet rising semiconductor and electronics materials demand, though the associated plant construction requires substantial capital and is also flagged as a financial burden factor.

Outlook

Through 2026, BGF Retail has shown a recovery in same-store sales growth alongside new store openings and cost efficiencies from closing underperforming locations, which could positively feed into the holding company's equity-method income from that stake.

The company has cited experiential concept stores and expanded grocery-focused and smart-grocery formats catering to single- and two-person households as key strategies (as reported by Smart Today, dated May 11, 2026).

In the materials/chemistry segment, BGF Ecomaterials completed its merger with Chosun Chemical (Daewon Chemical) in September 2025, expanding its business scope, while investment continues in semiconductor materials capacity through subsidiary KNW's Fluorine Korea anhydrous hydrofluoric acid production facility, with new-business results expected to feed into future equity-method gains.

That said, affiliate-level equity adjustments are ongoing — in August 2026 BGF Ecomaterials acquired 800,000 shares of BGF Ecosolution for KRW 38.4bn via a put-option exercise — suggesting continued near-term investment-related cash outflows are possible.

At the holding-company level, the FY2025 financial statements and dividend were already resolved at the March 2026 annual general meeting, so the next dividend policy discussion will occur once FY2026 results are finalized.

Across the convenience-store industry more broadly, franchise-related cost variables such as minimum wage and store-proximity regulations remain a persistent factor that could indirectly affect BGF Retail's profitability and, in turn, the holding company's equity-method income.

Valuation

PER

5.6×

PBR

0.2×

ROE

3.7%

EPS

₩693

BPS

₩18,849

Dividend per share

₩130

BGF tends to trade at a sizable discount to net asset value, with its price-to-book ratio positioned well below 1x.

This can be read as a combination of the typical 'holding-company discount' applied to pure holding structures and the 2025 earnings pattern in which owners' net income moved in the opposite direction from revenue and operating profit.

The price-to-earnings level has fluctuated between the upper and lower ends of the holding company's historical trading band, and has recently been forming during a phase of earnings recovery. The company has maintained annual cash dividends, with the payout scaling in line with the earnings trend.

However, these ratios tend to move together with the share prices and results of listed affiliates such as BGF Retail and BGF Ecomaterials, making the holding company's valuation more sensitive to shifts in its affiliate portfolio's value than to any standalone operating business of its own.

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

Core Subsidiary CU's Earnings Recovery

BGF Retail's operating profit surged 68.6% year-on-year in 2026 Q1, and preliminary Q2 operating profit continued the recovery with a 22.3% increase (as reported by Financial Today in May 2026 and Insight in August 2026, respectively).

Same-store sales recovery, store-network rationalization benefits, and SG&A efficiencies are appearing simultaneously. As the holding company owns roughly a 30% stake in BGF Retail, this improvement could flow through as higher equity-method income.

Diversification into Materials/Chemistry

BGF Ecomaterials has expanded from automotive materials into semiconductor materials such as anhydrous hydrofluoric acid through the Daewon Chemical merger and the acquisitions of KNW and Fluorine Korea.

The holding company owns more than 65% of this subsidiary as its largest shareholder, giving it potential exposure to new-business results going forward. This diversifies the portfolio from a retail-centric structure into materials and chemistry as well.

Low Leverage and Improving Cash Generation

The debt ratio rose only modestly from 11.6% in 2022 to 18.5% in 2025, remaining low overall. Operating cash flow also improved sharply, from just KRW 0.2bn in 2022 to KRW 52.7bn in 2025, indicating that financial stability has been maintained at the holding-company level.

Bear factors

Net Income Diverging from Revenue and Operating Profit

In 2025, consolidated revenue and operating profit rose 8.2% and 10.8% respectively, but owners' net income actually fell from KRW 92.1bn to KRW 59.1bn. This suggests non-operating factors related to equity-method accounting or investment assets, rather than sales and operations, drove the swing.

This kind of volatility could recur depending on future subsidiary performance or changes in the value of investment holdings.

Concerns over Capital Movement from Governance Restructuring

During the 2024 governance restructuring, BGF Networks, previously held by the parent company, was transferred to BGF Retail, and part of the proceeds was used for a rights offering in the materials segment.

At the time, the market reacted with share-price declines amid concerns that selling the subsidiary that had served as the holding company's cash reserve could reduce dividend resources (as reported by The Bell and Topdaily, dated June 2024).

Such intra-group movements of capital and equity stakes remain a variable that could affect the holding company's own cash flow going forward.

Structural Dependence on Subsidiary Performance

BGF is a pure holding company with no operating business of its own, so its results depend entirely on equity-method income and dividends received from subsidiaries such as BGF Retail and BGF Ecomaterials.

As a result, holding-company results can swing relatively sharply depending on subsidiary business conditions or investment-asset valuations. The audit report has flagged impairment testing of investments in subsidiaries as a key audit matter, and related uncertainty persists.

Risk factors

Governance and Succession Risk

A structure has formed in which the founder's elder and younger sons separately lead the retail segment (holding company and BGF Retail) and the materials/chemistry segment (BGF Ecomaterials), respectively.

This has repeatedly involved intra-group transfers of equity and capital, and further transactions to reinforce the succession structure could occur in the future. This can reduce the predictability of capital allocation from a minority shareholder's perspective.

Accounting and Audit Risk

The audit report has identified impairment testing of investments in subsidiaries as a key audit matter, and the 2025 decline in owners' net income is believed to be related to this issue.

The possibility of further impairment recognition, depending on future subsidiary valuations or business-environment changes, cannot be ruled out. This could continue to amplify the volatility of owners' net income relative to consolidated results.

Industry and Cost Risk

The convenience-store industry remains continuously exposed to franchise-related cost variables such as minimum wage increases and store-proximity regulations, which could indirectly affect BGF Retail's profitability and the holding company's equity-method income.

The materials/chemistry segment is likewise exposed to semiconductor and automotive-industry cycles and raw-material price swings. Sensitivity to macro conditions across both business pillars constrains the stability of the holding company's overall results.

What to watch next

Mid-November 2026 (approximate)
Watch for BGF's preliminary Q3 2026 earnings disclosure — a chance to check peak-season convenience-store sales trends and how equity-method gains flow through.
February-March 2027 (approximate)
Confirmation of FY2026 consolidated results and the dividend resolution at the annual general meeting — worth checking whether the 2025 pattern of declining net income recurs and whether the dividend policy is maintained.
H2 2026 through 2027
Monitor disclosures on the progress and start-up timing of semiconductor materials (e.g., anhydrous hydrofluoric acid) capacity expansion within the BGF Ecomaterials group.
From Q4 2026 onward
Check for any further BGF Group governance restructuring or intra-group equity/capital transfer disclosures to assess their impact on the succession structure and the holding company's capital allocation.
Q4 2026 (ongoing)
Continue tracking BGF Retail's same-store sales growth and overseas store openings (Mongolia, Kazakhstan) to monitor changes in its contribution to the holding company's equity-method income.

Overall view

BGF is a pure holding company built around two main pillars: BGF Retail, operator of Korea's leading convenience store chain CU, and BGF Ecomaterials, which handles semiconductor and automotive materials — a structure in which results are directly driven by equity-method income and dividends from subsidiaries.

In 2025, consolidated revenue and operating profit both rose, yet owners' net income moved in the opposite direction and declined, a divergence believed to be linked to non-operating factors such as impairment testing of investments in subsidiaries.

Meanwhile, core subsidiary BGF Retail has shown a clear earnings improvement through 2026 on the back of same-store sales recovery and store-network efficiencies, offering potential upside contribution to the holding company via equity-method income going forward.

Financial stability has been maintained, with the debt ratio staying low and operating cash flow improving. That said, repeated intra-group transfers of equity and capital during governance restructuring, along with impairment-related uncertainty flagged in the audit report, remain outstanding variables.

Investors should comprehensively track upcoming quarterly results, subsidiary business developments, and governance-related disclosures to understand the holding company's structural characteristics.

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.