SJ Group's stock price is plummeting without a bottom in sight. The company's exclusive imports of brands are not as popular as they once were, and clothing sales have decreased due to poor economic conditions, leading to a loss last year. Amid the poor performance, CEO Lee Ju-young, the founder and owner of the company, is focusing on investments. Despite reporting an operating loss last year, the company made investments exceeding 5 billion won through its affiliate SJ Partners.
SJ Group's stock price is currently trading at around 4,000 won. This is the lowest since the company was listed on the KOSDAQ market in 2019. The continuous decline in stock price is attributed to the ongoing deterioration in performance. SJ Group is an entity that exclusively imports and sells various fashion brands such as "Kangol," "Helen Kaminski," "Pan Am," "ECCO," and "Rainz." At one time, Kangol gained significant sales when it became known as the hat worn by BTS.
However, the situation has changed as brand loyalty has decreased and sales have dropped. Until a few years ago, annual operating profit was around 30 billion won, but as profits declined, the company reported a loss last year.
With sluggish sales, it does not seem easy to improve the financial situation moving forward. Samil Accounting Corporation, which conducted the external audit of SJ Group last year, pointed out excessive inventory assets as a risk factor. As of the end of last year, the company's inventory assets amounted to 39.1 billion won, making up more than 20% of total assets. A large amount of inventory assets means, simply put, that unsold goods are piling up.
Lee Ju-young, CEO of SJ Group, noted during the initial public offering (IPO) that "what I felt while working as an examiner in a startup investment company is that finance dies from bad debts, and fashion dies from long-term inventory." This indicates that the risks regarded as most dangerous by the CEO are putting pressure on the financial situation.
In the midst of poor performance in its main business, investors are paying attention to the company’s investment endeavors. SJ Group obtained qualifications as a new technology business finance company in 2022 and established SJ Partners, in which it holds 100% equity. CEO Lee Ju-young previously worked as an examiner at Incu-Venture Startup Investment before founding SJ Group, which seems to have been fully utilized.
Since last year, SJ Group has actively started investing in the funds created by SJ Partners. The company invested 1 billion won each in the "SJ Healthcare Fund" and the "SJ Semiconductor Material and Components No. 1 New Technology Investment Association."
SJ Partners' investment portfolio includes companies such as Orum Therapeutics, SHIFT UP, YJ Link, IVISIONWORKS, ICTK, INNOSPACE, CONTEC, and Millie's Library, which were listed on the stock market last year or are preparing for an IPO.
In addition, SJ Group established Shinhan 15th Special Purpose Acquisition Company and invested 2.7 billion won to acquire 1.08% equity in MarqVision, an artificial intelligence (AI) based intellectual property protection solution company founded by Lee In-seop in the United States.
The industry is analyzing that SJ Group is following the moves of STIC Investments. STIC Investments, a private equity fund manager listed on the stock market, was originally a subsidiary of DPC, which produced electronic components and held 100% equity.
However, after STIC Investments was merged into its parent company DPC, it transformed into a full-fledged investment firm. After selling off its manufacturing sector, it also changed its name from DPC to STIC Investments. The subsidiary has effectively swallowed up the parent company. Capital market officials believe that SJ Group's influence in the investment sector will gradually increase.