[News Space=Reporter seungwon lee] 

Bathroom specialist Daelim Bath (formerly Daelim B&Co, CEO Kang Tae-sik) has completely escaped the sluggish performance of 2023, where it recorded a consolidated net loss of 5.55 billion KRW, by posting 300.6 billion KRW in revenue and 13.5 billion KRW in net profit.

 

However, behind the flashy turnaround figures, the company is still tagged with the lowest investment-grade credit rating (BBB-). With 56.9 billion KRW in short-term borrowings weighing down as current liabilities, its current ratio stands at a mere 105.4%, revealing the limits of its financial health.

 

In particular, despite retained earnings reaching 144.8 billion KRW (on a separate basis), Chairman Lee Hae-young, the largest shareholder, received only 1 billion KRW in dividends, sparking controversy over the equity of the shareholder return policy. Furthermore, it was confirmed that 8.84 billion KRW was paid to just three registered directors, highlighting an imbalance in the profit distribution structure. In January 2026, the auditor resigned midway through their term without completing it, adding concerns about a governance vacuum.

 

Daelim Bath Co., Ltd. (KOSPI-listed, stock code 000750) is a leading Korean company specializing in sanitary ware and bathrooms, established in 1967. Through a resolution at the regular general meeting of shareholders on March 28, 2025, the company changed its name from the existing 'Daelim B&Co' to the current 'Daelim Bath,' and its headquarters is located at 52 Gongdan-ro, Seongsan-gu, Changwon-si, Gyeongsangnam-do. This report is based on the 58th annual business report submitted to the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART) on March 19, 2026.

 

Daelim Bath's consolidated revenue for 2025 was 300.6 billion KRW, a 6.9% increase from 281.1 billion KRW the previous year. Operating profit was 18.6 billion KRW, an 84.4% surge from 10.1 billion KRW the previous year, and net profit was 13.5 billion KRW, a staggering 136.5% jump from 5.7 billion KRW the previous year. Earnings per share (EPS) also more than doubled to 812 KRW (compared to 322 KRW the previous year). The company explained, "After recording a consolidated net loss of 5.55 billion KRW in 2023, we transitioned to a surplus in 2024 and entered a full-scale profitability recovery trajectory in 2025."

 

However, the operating profit margin is only about 6.2%. The burden of selling, general, and administrative (SG&A) expenses, which well exceed half of the revenue, is holding back profitability improvement. The total consolidated SG&A expenses for 2025 were approximately 64.5 billion KRW, with salaries accounting for 22.78 billion KRW, commissions paid for 10.85 billion KRW, retirement benefits for 4.76 billion KRW, advertising expenses for 3.16 billion KRW, and welfare benefits for 2.9 billion KRW.

 

In particular, commissions paid, which increased by 15% from the previous year to 10.85 billion KRW, refer to service costs requested from external experts or institutions, such as marketing and PR agency fees, legal advice and audit fees, and external service and consulting costs. The surge in commissions paid shows that the company receives a lot of help from external expert groups such as PR agencies and law firms. However, detailed disclosure on the specific payment counterparties and purposes is limited.

 

By business segment, the Bath division, centered on sanitary ware and faucets, is single-handedly supporting more than 90% of the company's total profit with 195.7 billion KRW in revenue and 16.8 billion KRW in operating profit. On the other hand, the BK division (36.9 billion KRW revenue, 1.4 billion KRW operating profit) responsible for bathroom and kitchen interiors, the Care (rental) division (31.8 billion KRW revenue, 700 million KRW operating profit), and the furniture division operated by the subsidiary Fine Wood Living (36.1 billion KRW revenue, 180 million KRW operating profit) have extremely low profitability. The operating profit margin of the furniture division is less than 0.5%, meaning it effectively contributes almost nothing to profit.

 

As of the end of 2025, consolidated total assets were 338.5 billion KRW (348.3 billion KRW the previous year), and total liabilities were 163.1 billion KRW (186.5 billion KRW the previous year), so the size of liabilities itself has decreased. The equity-to-assets ratio is 51.8%, and the debt-to-equity ratio is 93.0%, which looks stable on the surface.

 

However, looking inside, it is different. With short-term borrowings reaching 56.9 billion KRW and 10 billion KRW in long-term borrowings reclassified as liquidity items during 2025, pressure for short-term repayment has increased. Compared to current assets of 125.9 billion KRW, current liabilities are 119.5 billion KRW, resulting in a current ratio of only 105.4%.

 

It is a 'precarious' structure that could lead to an immediate liquidity crunch if a short-term shock occurs. Cash and cash equivalents (consolidated) decreased to 11.02 billion KRW from 15.66 billion KRW the previous year.

NICE Investors Service rated Daelim Bath's credit rating as BBB- as of August 23, 2025. This is the lowest level among investment-grade ratings, meaning that if it drops by just one notch, it will fall to speculative grade (BB+). A BBB- credit rating is taken as a potential risk signal as it can lead to financial institutions collecting loans or a decline in the reliability of business partners during an economic downturn.

 

Consolidated intangible assets are 14.27 billion KRW, which is over 11.3 billion KRW higher than the separate basis (2.91 billion KRW). Because the gap in intangible assets between consolidated and separate statements is significant, it is estimated that goodwill or brand-related assets generated in the process of acquiring subsidiaries are included; however, because detailed information on the report is limited, it is treated as 'uncertain.'

 

Daelim Bath's related-party transactions appear structurally entrenched. In 2025 (consolidated), purchases from Daelim Vatos Co., Ltd. were 12.19 billion KRW (12.46 billion KRW the previous year), and purchases from Lee Su-in Co., Ltd. were 13.41 billion KRW (13.62 billion KRW the previous year), with the total purchases from these two related parties reaching approximately 25.6 billion KRW. This is about 8.5% of the consolidated revenue of 300.6 billion KRW.

 

Such related-party purchase structures require continuous monitoring in that if transactions between affiliates are fixed without market competitive bidding, cost efficiency is difficult to verify, and it can become a means of transferring profits externally. However, independent external verification details regarding the appropriateness of transaction conditions are not found in the disclosures.

 

Cash dividends to related party Fine Wood Capital (LLC) were recorded at 29.23 million KRW. In addition, Daelim Bath has a drag-along right agreement with external investors regarding its subsidiary Fine Wood Living, with a remaining agreement amount of 12.24 billion KRW. Drag-along clauses are classified as a potential governance risk factor because Daelim Bath may also have to agree to a joint sale if external investors demand the sale of their stake.

 

Daelim Bath resolved to pay a dividend of 180 KRW per share for the 58th fiscal year (2025). Although this has steadily increased from 150 KRW the previous year and 110 KRW the year before, it is a negligible level compared to the scale of retained earnings. Total dividend payments amounted to 2.958 billion KRW, which corresponds to a cash dividend payout ratio of 22.1% compared to a consolidated net profit of 13.5 billion KRW. Compared to the previous year's payout ratio of 46.6%, it has more than halved.

 

Retained earnings on a separate basis are 144.8 billion KRW. A structure where the company retains the profits it has accumulated for decades within the company rather than returning them to shareholders leaves room for dissatisfaction from general minority shareholders.

 

The estimated dividend receipt for the largest shareholder, Chairman Lee Hae-young (holding 5,560,424 shares, 33.35% stake), is approximately 1 billion KRW (5,560,424 shares × 180 KRW). If based on the entire owner family's stake (approximately 49.85%), including related parties, about 1.47 billion KRW in dividends is concentrated in the owner family. Daelim Bath has continued to pay dividends for 13 consecutive times from the 46th fiscal year in 2013 to the 58th fiscal year in 2025.

 

The executive compensation structure is at a level that should be conscious of external eyes. As of the 2025 fiscal year, the total compensation paid to a total of 5 registered directors and auditors was 10.35 billion KRW, with an average of 2.07 billion KRW per person. 8.84 billion KRW was paid to only 3 registered directors excluding outside directors, and the average per person reaches 2.95 billion KRW.

 

The total annual salary of 12 non-registered executives is also 16.59 billion KRW (average of 1.38 billion KRW per person), and total executive compensation is equivalent to the company's operating profit (18.6 billion KRW).

Chairman Lee Hae-young's personal compensation is 501.6 million KRW in total, adding up 493.6 million KRW in salary, 5.9 million KRW in bonuses, and 1.1 million KRW in other earned income. This figure is official compensation as the largest shareholder and internal director (Chairman), and when added to the dividend receipt of 1 billion KRW, Chairman Lee Hae-young's annual receipts from the company are estimated to be over 1.5 billion KRW.

The director compensation limit approved at the regular general meeting of shareholders on March 28, 2025, was 2 billion KRW, but the actual total compensation paid to registered directors and auditors was 10.35 billion KRW, which is more than 5 times the limit.

 

Daelim Bath acquired 251,300 treasury shares on 59 occasions from February 7 to May 2, 2025. Afterward, it disposed of 12,800 shares on December 23, 2025, for executive incentive purposes. While treasury stock repurchases can be used as a means to boost stock prices, some critics argue that the structure in which some volume is converted into executive incentives has limited effect in actually enhancing shareholder value.

 

On January 15, 2026, auditor Kang Seung-yoon resigned midway through his term without completing it. An auditor is a key governance mechanism that checks the board of directors and management. The reason for resignation was not specified in the disclosure, which could raise market concerns about a governance vacuum and weakened internal controls. The mid-term resignation of an auditor of a listed company is a rare case, and careful attention from stakeholders is required.

 

As of the end of 2025, there is 1 lawsuit pending in which Daelim Bath is the defendant, and the litigation amount is 2 million KRW, which is negligible in scale. The company disclosed that it is currently difficult to predict the outcome of the lawsuit.

 

Daelim Bath ranked 1st for 10 consecutive years in the bathroom remodeling category and 1st for 4 consecutive years in the sanitary ware category in the Korea Brand Power Index (K-BPI) survey. Although its brand status in the domestic bathroom market is solid, failure to diversify profitability (low profitability in furniture and rental sectors) and the limitation of a BBB- credit rating are acting as structural constraints on securing growth momentum.

A corporate financial analysis expert pointed out, "Daelim Bath's liquidity structure of 56.9 billion KRW in short-term borrowings and a 105.4% current ratio reveals a vulnerable constitution that can be immediately impacted by rising interest rates or economic downturns," adding, "In particular, the lowest investment-grade credit rating (BBB-) implies both higher borrowing costs and the possibility of business partner departures."

 

They also pinched, "The structure of paying 8.84 billion KRW in compensation to 3 registered directors while keeping the dividend payout ratio low at 22.1% while accumulating 144.8 billion KRW in retained earnings shows a serious imbalance in profit distribution between general shareholders and management," and "This can raise suspicions that resource allocation centered on internal stakeholders is taking place rather than enhancing shareholder value."

 

Furthermore, they warned, "The fixed internal transaction structure where annual purchases from related parties (Daelim Vatos, Lee Su-in) reach 25.6 billion KRW makes independent verification of cost competitiveness difficult, and the drag-along right agreement of 12.24 billion KRW with external investors for Fine Wood Living is a 'ticking time bomb' that could trigger governance uncertainty at any time."

 

Moreover, they advised, "The sudden resignation of the auditor during their term could be an abnormal signal of the internal control system, and the low profitability of the furniture (operating profit margin less than 0.5%) and rental/BK divisions further highlights the vulnerability of the 'single dependence on the bath division' structure," and "Business portfolio diversification is urgent because if the bath division wavers, the company's entire profit could collapse together."