PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Prices as of the 2026-10-02 close
Heng Sheng Holding Group, rooted in toy manufacturing, saw 2025 revenue and operating profit slip back into the red, but net profit recovered for two straight quarters in the first half of 2026, even as the company keeps expanding into cosmetics distribution, AI toys and IP content while repeatedly reshaping its capital structure through rights issues and convertible bonds.
FY2025 revenue fell 11.1% year over year to KRW 111.16 billion, operating profit swung to a loss of KRW 0.22 billion, and net profit posted a loss of KRW 4.56 billion.
Net profit turned positive for two consecutive quarters in 2026 (KRW 1.64 billion in Q1, KRW 1.69 billion in Q2), but operating profit remained near breakeven at roughly KRW 0.01 billion in Q2.
Beyond its core toy unit, Jinjiang Hengsheng Toys, the company is expanding into cosmetics distribution through HS Beauty, AI toys, character IP content and artist management.
A stock consolidation decided in late 2025 was completed at a 5-for-1 ratio in July 2026, followed by a third-party rights issue to the largest shareholder in August and additional new-share listings in September, repeatedly reshaping capital and ownership structure.
China's AI toy market is expected to grow rapidly, but a new toy safety standard (GB 6675) taking effect in November 2026 could add compliance costs.
Founded in 1992 and headquartered in Hong Kong with production based in Jinjiang, Fujian Province, China, Heng Sheng Holding Group is a toy and children's products maker listed on KOSDAQ as a foreign company.
Its core subsidiary, Jinjiang Hengsheng Toys, produces stuffed and motorized toys and has a history of supplying global brands such as Disney, Mattel and Fisher-Price, including dolls for Shanghai Disneyland. The company has been shifting from OEM/ODM manufacturing toward own-brand (OBM) production.
Another subsidiary, Quanzhou Jazzit Apparel, sells children's clothing, shoes and bags built around the in-house animated character IP 'Jazzit.' Since June 2020, the company has also produced face masks, adding a new revenue stream triggered by the pandemic.
Through its wholly owned subsidiary HS Beauty, it distributes more than 30 small and mid-sized Korean cosmetics brands in China and plans to add more brands to drive growth.
On top of these, the company is developing AI-based smart toys and expanding into character IP content and artist management, broadening its scope from a toy manufacturer toward a comprehensive consumer goods and cultural content company.
The number of consolidated subsidiaries increased from four to five year over year, with two identified as major subsidiaries.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩28.3B | -₩100M | −0.4% |
| 2025Q3 | ₩30.5B | ₩1.4B | 4.6% |
| 2025Q4 | ₩33.5B | -₩200M | −0.6% |
| 2026Q1 | ₩21.2B | -₩80,931,501 | −0.4% |
| 2026Q2 | ₩27B | ₩8,589,614 | 0.0% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩138.8B | ₩4.6B | -₩2.1B | 3.3% | −0.6% | 18.4% |
| 2023 | ₩120.6B | -₩200M | -₩900M | −0.1% | −0.3% | 16.7% |
| 2024 | ₩125.1B | ₩7.9B | ₩2.5B | 6.3% | 0.7% | 18.7% |
| 2025 | ₩111.2B | -₩200M | -₩4.6B | −0.2% | −1.2% | 15.6% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-05
In 2022, revenue reached KRW 138.81 billion with operating profit of KRW 4.57 billion (operating margin 3.3%), though the bottom line showed a net loss of KRW 2.06 billion.
In 2023, revenue declined to KRW 120.63 billion, operating profit swung to a loss of KRW 0.15 billion, and the net loss continued at KRW 0.91 billion.
In 2024, revenue rose to KRW 125.10 billion with a marked improvement in operating profit to KRW 7.85 billion (margin 6.3%), and net profit turned positive at KRW 2.50 billion.
In 2025, however, revenue fell 11.1% again to KRW 111.16 billion, operating profit swung back to a loss of KRW 0.22 billion (margin -0.2%), and the net loss widened to KRW 4.56 billion.
On a quarterly basis, results through the third quarter of 2025 were relatively solid, with revenue of KRW 30.53 billion, operating profit of KRW 1.41 billion and net profit of KRW 0.78 billion, but the fourth quarter saw revenue rise to KRW 33.54 billion while operating profit fell to a loss of KRW 0.22 billion and the net loss ballooned to KRW 5.34 billion, dragging down the full-year result.
Into 2026, the company posted revenue of KRW 21.17 billion with an operating loss of KRW 0.08 billion but net profit of KRW 1.64 billion in the first quarter, and revenue of KRW 26.96 billion with a thin operating profit of KRW 0.01 billion but net profit of KRW 1.69 billion in the second quarter, extending net profit gains to two straight quarters even as operating profit itself hovered near breakeven, suggesting the bottom-line recovery leans heavily on non-operating items.
On the cash flow side, 2025 operating cash flow reached KRW 24.66 billion, the highest of the four years reviewed, indicating that underlying cash generation held up even in a net-loss year. The debt ratio fluctuated within a 15.6%–18.7% range between 2022 and 2025, pointing to consistently low financial leverage.
The global toy market is in a phase of moderate expansion, with growth projected at a compound annual rate of 4.3% between 2025 and 2030.
Within China, the toy industry is rapidly shifting from traditional manufacturing toward AI toys, with China's Ministry of Industry and Information Technology characterizing the sector as entering a new stage of 'smart development.' The China Commercial Industry Research Institute projected China's AI toy market could reach 85 billion yuan (roughly KRW 19 trillion) by 2030, with the 2025 market estimated at around 29 billion yuan.
However, competition has intensified with the entry of large technology firms such as Huawei, JD.com and UBTech, with the top ten brands accounting for 62.8% of market share, creating both a barrier and an opportunity for smaller toy manufacturers.
On the regulatory front, a new national toy safety standard (GB 6675) takes effect on November 1, 2026, tightening electromagnetic compatibility and data privacy requirements for AI toys, which could raise industry-wide quality and compliance costs.
In the cosmetics distribution segment, shifts in Korea-China trade and tourism conditions remain a variable that could affect results.
Having started as a traditional toy manufacturer and exporter, Heng Sheng Holding Group now also operates cosmetics distribution and IP/content businesses, giving it a relatively broader portfolio than pure-play toy makers, though the scale and profit contribution of each segment are not yet clearly disclosed in segment-level revenue data.
The company has signaled a strategic direction of broadening its portfolio into a comprehensive consumer goods and cultural content business through AI-based smart toy development and character IP-driven content and artist management.
Its cosmetics distribution subsidiary, HS Beauty, plans to grow by adding more promising Korean brands, while the toy business has stated intentions to improve profitability by expanding its premium product lineup.
On the financing side, following a convertible bond issuance of HKD 16 million to a Hong Kong private equity fund in February 2026, the company decided on a third-party rights issue of KRW 5.2 billion (1,749,353 shares at KRW 2,100 per share) to largest shareholder Hui Mei Nga in August, and in September listed an additional 5.6 million new shares from a July issuance (at KRW 3,000 per share, roughly KRW 16.8 billion) subject to a one-year lock-up.
Disclosures indicate the raised funds are earmarked for sequential use on purchase costs (about KRW 1.1 billion in 2026 and KRW 1.84 billion in 2027) and marketing costs (about KRW 0.47 billion in 2026 and KRW 0.79 billion in 2027).
Whether this string of capital raises translates into expanded sales networks and R&D investment for the toy and cosmetics businesses, or remains merely a source of repeated share dilution, is a key point to watch going forward.
In the toy segment, how the company responds to China's new toy safety standard (GB 6675), effective November 2026, is another variable that could affect costs and product development schedules.
Although the company has posted net profit for two consecutive recent quarters, the trailing four-quarter sum still shows a net loss, making a price-to-earnings comparison over that window difficult to interpret meaningfully.
The share price appears to trade below the company's net asset value per share, suggesting the market is pricing the stock at a discount to book value. There has been no dividend payment based on recent disclosures, so a dividend-yield comparison is not applicable.
Looking across multiple years, the company swung from a loss in 2023 to a profit in 2024, back to a loss in 2025, and has now shown two consecutive quarters of profit recovery in 2026 — whether this recovery can be sustained in coming quarters remains a key variable for any valuation assessment.
The repeated rights issues and convertible bond issuances that have kept changing the share count outstanding should also be factored in when interpreting any per-share metric.
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 2026-09-05
Net profit came in at roughly KRW 1.6 billion in both the first and second quarters of 2026, pulling the company out of the large net loss seen in 2025. Revenue also rose from KRW 21.17 billion in the first quarter to KRW 26.96 billion in the second.
However, operating profit itself remained near breakeven, so whether the profit recovery reflects core-business improvement or non-operating factors will require confirmation in coming quarters.
The debt ratio has remained stable in the 15.6%–18.7% range between 2022 and 2025. Even in a net-loss year, 2025 operating cash flow reached KRW 24.66 billion, the highest of the four years. Additional funding through convertible bonds and rights issues in 2026 has further bolstered near-term liquidity.
Beyond toy manufacturing, the company is expanding into cosmetics distribution through HS Beauty, AI toys, and character IP and artist management. China's AI toy market is projected to grow to 85 billion yuan by 2030, a high-growth field.
However, the revenue contribution of these newer businesses has not yet been confirmed in disclosed segment data, so the timing of any earnings contribution warrants continued monitoring.
2025 revenue fell 11.1% year over year to KRW 111.16 billion, and compared with KRW 138.81 billion in 2022, the trend over three years has also been a decline. The toy segment still relies on a mix of own brands and OEM/ODM manufacturing, without a clear structural shift toward growth.
Longer-term demand factors such as a shrinking child population could also weigh on toy and children's apparel sales.
Following a stock consolidation decision in December 2025, the company issued convertible bonds in February 2026, conducted a third-party rights issue to its largest shareholder in August, and listed an additional 5.6 million new shares in September — a rapid succession of capital-raising events.
Such repeated new-share issuance increases volatility in share count and ownership structure. Even with lock-up conditions in place, the possibility of expanded float once lock-ups expire remains a factor to watch.
In the fourth quarter of 2025, even as revenue rose to KRW 33.54 billion, the net loss widened to KRW 5.34 billion, severely damaging full-year results.
Even during the net-profit recovery in the first and second quarters of 2026, operating profit remained at only about negative KRW 0.08 billion and positive KRW 0.01 billion respectively, meaning improvement in core profitability is not yet clearly evident.
This pattern suggests quarterly results could continue to swing significantly depending on volatility in non-operating items.
In a short span of time, the company has issued convertible bonds, conducted a third-party rights issue to its largest shareholder, and listed additional new shares in succession, continuously altering share count and ownership structure.
The repeated allotments to the largest shareholder are a governance-related factor worth noting. There is also a possibility that float could expand around future convertible bond conversions or lock-up expirations.
The toy and children's apparel businesses are exposed to global consumption trends and seasonal demand, and growth has not been stable, as shown by the 2025 revenue decline.
Because the company's financial statements translate yuan-denominated results into won, fluctuations in the won/yuan exchange rate can also affect consolidated results.
Starting November 1, 2026, China will implement a new toy safety national standard (GB 6675) that tightens electromagnetic compatibility and data privacy requirements for AI toys. This could raise product development and certification costs.
Changes in Korea-China relations or external trade conditions are also variables that could affect both the toy export and cosmetics distribution businesses.
China's new toy safety national standard (GB 6675) takes effect - check how tightened electromagnetic compatibility and data privacy requirements affect the toy segment's costs and product schedules.
In the Q3 2026 earnings disclosure, check whether operating profit moves clearly above breakeven and whether the net profit recovery extends beyond two consecutive quarters.
Check whether the planned use of proceeds disclosed in the August rights issue — about KRW 1.1 billion in purchase costs and KRW 0.47 billion in marketing costs for 2026 — is actually executed, and whether it translates into expanded sales networks for the toy and cosmetics businesses.
One-year lock-up expiration for the 5.6 million shares additionally listed on September 4, 2026 from the third-party rights issue - check whether float expands once the lock-up is lifted.
Heng Sheng Holding Group is a China-based KOSDAQ-listed company that, rooted in toy manufacturing, has been expanding into cosmetics distribution, AI toys, and character IP and artist management.
After turning profitable in 2024, the company slipped back into a loss in 2025, with a large net loss in the fourth quarter severely damaging full-year results, though net profit recovered for two consecutive quarters in the first half of 2026, signaling a possible rebound.
However, operating profit itself has remained near breakeven, so the durability of the profit recovery has not yet been confirmed.
A low debt ratio and sustained cash generation are positive from a financial stability standpoint, but the rapid succession of convertible bond issuances, rights issues, and stock consolidation over a short period adds uncertainty to the ownership structure.
Whether the recovery in the core toy and cosmetics businesses continues, how the company responds to China's new toy safety standard taking effect in November 2026, and how float changes once share lock-ups expire are the key variables to watch going forward.
Report written 2026-09-05 · Data as of 2026-09-04
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