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
Codes Combine's operating profit more than doubled in 2025 from the prior year and net income attributable to owners spiked in the second quarter of 2026, but a history of related-party trademark transactions with the founder family's affiliate and repeated changes in the largest shareholder remain factors worth monitoring.
Consolidated operating profit reached 2.42 billion won in 2025, more than double the 1.06 billion won recorded in 2024, lifting the operating margin from 2.7% to 6.1%.
Net income attributable to owners in the second quarter of 2026 reached 5.98 billion won, far exceeding the 1.62 billion won operating profit for the same quarter, suggesting a sizable non-operating gain was booked.
The debt ratio declined from 35.0% in 2022 to 28.5% in 2025, marking the most improved balance-sheet position over the four-year window.
In 2014 the founder family's affiliate Ko&Com acquired the Codes Combine innerwear trademark and inventory for 25 billion won and built a separate business, and press reports say Ko&Com's cumulative operating profit over the following decade far exceeded that of listed Codes Combine itself.
The largest shareholder changed in 2024 from the founder's company Cotton Club to Ko&Com, wholly owned by the founder's son, and additional largest-shareholder-change filings were registered on the KRX KIND disclosure channel in May 2026.
Codes Combine was founded in 1995 and listed on KOSDAQ in 2001 as a manufacturer and distributor of women's casual apparel, developed its own brand Codes Combine in 2002 to build domestic recognition, signed a license agreement for the US brand JOCKEY in 2016 to supply products through outlets such as E-Mart, and has pursued diversification since 2020 through new businesses including KF-94 mask manufacturing.
The company primarily targets younger consumers in their 20s and 30s with relatively affordable, trend-driven styles.
On the governance side, however, there is a notable structural feature: Ko&Com signed a business transfer agreement with Codes Combine immediately after its founding and acquired the 'codes combine' trademark and inventory for a total of 25 billion won, comprising 18.6 billion won for the trademark and 6.4 billion won for inventory, and used these assets to launch a Codes Combine innerwear business.
This company is a private firm wholly owned by director Kim Sang-hyun, the son of Codes Combine and Cotton Club chairman Kim Bo-sun.
Ko&Com subsequently grew rapidly, and press reports say its cumulative operating profit over the decade since 2014 reached 122.2 billion won, while Codes Combine's cumulative operating profit from its 2016 turnaround to net loss recovery through last year totaled only 23.8 billion won.
In 2024, Cotton Club, the previous largest shareholder, transferred 19 million shares (50.21%) of Codes Combine to Ko&Com via an off-hours trade, shifting the largest shareholder to the founder's son's private company.
This structure raises concerns about whether the interests of listed-company shareholders and the founder family's private affiliate are fully aligned.
Competitively, the company operates as a relatively small player in a market crowded with global SPA brands such as Zara and Uniqlo along with numerous domestic casual brands.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩9.5B | ₩100M | 1.4% |
| 2025Q3 | ₩9.6B | ₩1B | 10.4% |
| 2025Q4 | ₩12.4B | ₩900M | 6.9% |
| 2026Q1 | ₩9.8B | ₩800M | 8.0% |
| 2026Q2 | ₩12.3B | ₩1.6B | 13.2% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩39.1B | ₩3.9B | ₩7.6B | 9.9% | 12.8% | 35.0% |
| 2023 | ₩42B | ₩2.9B | ₩3.7B | 7.0% | 5.8% | 29.6% |
| 2024 | ₩39.6B | ₩1.1B | ₩1.9B | 2.7% | 2.8% | 31.0% |
| 2025 | ₩39.7B | ₩2.4B | ₩4.5B | 6.1% | 6.4% | 28.5% |
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
On an annual basis, revenue was 39.05 billion won with operating profit of 3.86 billion won (9.9% margin) in 2022, rising to 41.96 billion won in revenue in 2023 while operating profit fell to 2.93 billion won (7.0% margin), meaning revenue grew but margin narrowed.
In 2024, revenue declined to 39.60 billion won and operating profit shrank sharply to 1.06 billion won (2.7% margin), the weakest profitability of the four years.
In 2025, revenue held roughly steady at 39.72 billion won while operating profit more than doubled to 2.42 billion won, lifting the margin to 6.1%, and net income attributable to owners rose sharply to 4.46 billion won from 1.86 billion won a year earlier.
On a quarterly basis, profit was compressed in the second quarter of 2025 with revenue of 9.47 billion won, operating profit of 0.13 billion won, and net income of 0.61 billion won, before improving quickly in the third quarter to revenue of 9.56 billion won, operating profit of 0.99 billion won, and net income of 1.28 billion won.
The fourth quarter saw revenue rise seasonally to 12.36 billion won with operating profit of 0.85 billion won and net income of 1.01 billion won, and the first quarter of 2026 continued a similar pattern with revenue of 9.75 billion won, operating profit of 0.78 billion won, and net income of 1.10 billion won.
In the second quarter of 2026, revenue reached 12.26 billion won and operating profit 1.62 billion won, both improved, but net income attributable to owners came in at 5.98 billion won, overwhelmingly larger than operating profit, suggesting a substantial non-operating gain was booked.
Over the most recent four quarters (third quarter 2025 through second quarter 2026), cumulative revenue was 43.93 billion won and net income attributable to owners was 9.36 billion won, showing high quarter-to-quarter volatility but an overall direction leaning toward improvement.
However, the specific nature of the non-operating item behind the second-quarter 2026 net income surge is not detailed in the confirmed data, so its sustainability needs to be reconfirmed through subsequent disclosures.
The domestic casual apparel market is a mature market where global SPA brands such as Zara and Uniqlo compete alongside numerous domestic brands, with the focus increasingly on market-share competition and channel efficiency rather than top-line growth.
As the share of online and e-commerce channels continues to expand, managing sales commissions and inventory burden has become a key profitability variable for smaller, store-centric brands.
Codes Combine operates as a relatively small player in this market, responding by diversifying revenue sources beyond its own brand through the JOCKEY license and mask manufacturing.
According to the fashion industry, the average operating margin for apparel companies is reported to be around 8-10%, and Codes Combine has repeatedly traded below this band, meaning its 6.1% margin in 2025 still falls short of the industry average.
By contrast, the innerwear business run by founder-family affiliate Ko&Com was reported to have posted revenue of 11.5 billion won and operating profit of 5.1 billion won in its first five months of operation in 2014, an operating margin approaching 44%.
Even when leveraging the same brand assets, the large profitability gap between different operating entities is cited as a structural feature specific to this company. A slowdown in consumer sentiment or rising fabric and labor costs are variables that broadly affect the industry as a whole.
No official quantitative guidance from the company has been confirmed, but there is an assessment that an expanded share of higher-priced products in the fall/winter season and a strategy focused on suitable materials and styles have contributed to margin improvement, that the business has maintained a stable scale despite economic uncertainty, and that lifestyle changes are expanding new fashion business opportunities, making it worth watching whether this strategy continues going forward.
Diversification into non-apparel products such as masks since 2020 helps spread revenue sources, but without structural growth in the core apparel business, there may be limits to expanding overall revenue scale.
The nature and recurrence potential of the large non-operating gain booked in the second quarter of 2026 is a matter that needs further confirmation through future disclosures.
Regarding founder-family governance, given that an additional largest-shareholder-change filing was registered on the KRX KIND disclosure channel in May 2026 following the 2024 shareholder change, whether further ownership changes follow is also worth watching.
If consumer sentiment slows or raw-material and labor cost burdens increase, there remains a possibility that the margin, which already trails the industry average, could be pressured again.
As net income has swung significantly by quarter and by year in recent years, the earnings multiple the market assigns to this stock has also tended to move considerably with changes in profit expectations.
Another notable feature is that the company does not pay dividends, making it difficult to approach from a dividend-yield perspective.
The share price trades at a certain premium to the company's net asset value, which can be interpreted as reflecting both expectations for earnings recovery and governance risk related to the founder family at the same time.
The fact that earnings over the most recent four quarters have shown an improving direction relative to past annual results is a factor worth considering in valuation, but if quarters with a large gap between operating profit and net income, as seen in the second quarter of 2026, recur, how the market reflects this remains to be seen.
Ultimately, the valuation of this stock can be viewed as being influenced jointly by the pace of profitability recovery in the core apparel business and by whether governance issues are resolved.
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
The operating margin recovered to 6.1% in 2025 from a low of 2.7% in 2024, and the improvement trend in operating profit continued in the first half of 2026. Diversification into non-apparel products such as masks helps spread revenue sources and can cushion swings in the core apparel business.
The debt ratio also fell to its lowest level across the four-year window, leaving a relatively light financial burden.
Beyond its own Codes Combine brand, the company holds a license for the US brand JOCKEY, giving it stable distribution channels through retailers such as E-Mart. Expansion into new items such as mask manufacturing since 2020 has also reduced reliance on a single apparel brand.
This multi-source revenue structure can cushion the impact of weak sales in any single brand or season on overall results.
The debt ratio fell from 35.0% in 2022 to 28.5% in 2025, gradually strengthening the balance sheet. Operating cash flow also rose from 3.29 billion won in 2022 to 4.56 billion won in 2025, indicating that the earnings recovery is translating into actual cash generation.
Equity attributable to owners has also grown for four consecutive years, from 59.8 billion won in 2022 to 70.0 billion won in 2025.
Annual revenue has stayed in the 39-42 billion won range from 2022 through 2025, showing no clear structural top-line growth separate from margin improvement. Revenue of 39.7 billion won in 2025 was little changed from the 39.1 billion won level in 2022. A clear growth story through new brands or channel expansion has not yet been confirmed.
In 2014 Ko&Com, a private company owned by the founder family, acquired the Codes Combine innerwear trademark and inventory for 25 billion won and ran a separate business, and press reports say Ko&Com's cumulative operating profit over the following decade far exceeded that of listed Codes Combine itself.
In 2024 the largest shareholder changed from the founder's company Cotton Club to Ko&Com, owned by the founder's son, and an additional largest-shareholder-change filing was registered on the KRX KIND disclosure channel in May 2026.
This structure suggests the interests of listed-company shareholders and the founder family's private affiliate may not be fully aligned.
Net income attributable to owners of 5.98 billion won in the second quarter of 2026 far exceeded the 1.62 billion won operating profit for the same period, suggesting a large portion came from non-operating gains.
If such non-operating gains are one-off, net income could revert closer to operating-profit levels in subsequent quarters. The confirmed data does not break out the details of this non-operating item, so further disclosure would be needed to understand its nature.
Governance-related issues have accumulated, including trademark and inventory transactions with a founder-family-owned private company and repeated changes in the largest shareholder.
The possibility that the interests of minority shareholders and the founder family's private affiliate could diverge cannot be ruled out. Further related-party transaction or ownership-change disclosures could draw additional market attention going forward.
The gap between quarterly operating profit and net income is large, making it difficult to predict whether a given quarter's results will carry over into the next.
If quarters where net income far exceeds operating profit, as in the second quarter of 2026, do not recur, questions about the quality of earnings could arise. When estimating future results, it is necessary to examine both operating profit and net income together to separate out one-off factors.
The domestic casual apparel market is a mature market crowded with global SPA brands and numerous domestic brands, making it difficult to expand revenue scale. A slowdown in consumer sentiment or rising raw-material and labor costs could further pressure a margin that already trails the industry average.
Continued migration of consumption toward online channels could also weaken the relative competitiveness of brands centered on offline stores.
Check whether the profit-improvement trend seen over the 2025Q3-2026Q2 window continues into the third quarter of 2026, and in particular whether the gap between operating profit and net income widens again.
Verify the details of the largest-shareholder-change filings registered on the KRX KIND disclosure channel in May 2026 (May 19 and May 27) and whether further ownership changes follow.
Examine whether the strategy of increasing the share of higher-priced products again contributes to margin improvement this season, by tracking related sales and inventory figures.
Check how transactions with related parties such as Ko&Com and any changes in ownership structure are reflected in the annual business report.
Codes Combine's financial metrics showed an improving trend in 2025, with the operating margin recovering to 6.1% and the debt ratio falling to its lowest level across the four-year window.
Operating profit improvement continued in the first half of 2026, and in particular the second quarter saw net income attributable to owners far exceed operating profit, though the nature of this gain cannot be fully determined from the confirmed data alone.
Revenue has remained stagnant in the 39-42 billion won range for four consecutive years, so top-line growth is not clearly evident apart from margin improvement.
Meanwhile, the history of trademark transactions with the founder family's private company and repeated changes in the largest shareholder remain factors that warrant continued attention on the governance front.
When examining this stock, it is necessary to jointly monitor the pace of profitability recovery in the core apparel business, the sustainability of non-operating gains, and how governance issues develop. Investment judgment should be made by readers themselves after comprehensively weighing these facts.
Report written 2026-09-05 · Data as of 2026-09-04
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