[News Space=Reporter seungwon lee] It has been reported that SG Dinehill (CEO Park Young-sik) is in a state of capital erosion, having recorded operating losses and net losses for two consecutive years. 

According to the audit report of the Financial Supervisory Service's electronic disclosure system on the 16th, as of the financial statement date (March 25, 2024), the company's current liabilities are 4.6 billion won more than its current assets, indicating capital impairment.

The traditional Korean restaurant Samwon Garden was founded in 1976 by Park Soo-nam, the father of LPGA professional golfer Park Ji-eun, under the name of 'Samwonjeong'. It has been a leading Korean meat restaurant for about 50 years, hosting luncheons for high-level inter-Korean talks and welcoming dinners for separated families. Chairman Park Soo-nam has two daughters and one son (Park Ji-eun, Park Ji-hyun, and Park Young-sik).

SG Dainhill is a restaurant company that was launched in 2007 by CEO Park Young-sik, the son of CEO Park Soo-nam and the younger brother of player Park Ji-eun, with the goal of leading a new restaurant culture. CEO Park Young-sik, who grew up watching his father work in the restaurant industry, graduated from New York University’s Hotel Management Department in 2004 and jumped right into the management field. He is known to be close with Shinsegae Group Chairman Chung Yong-jin, and they often meet and cook together.

SG Dinehill currently operates contemporary Italian restaurant 'Blooming Garden', steakhouse 'Butcher's Cut', 'Pizzeria Cotto' that serves pizza using a wood-fired oven, Italian restaurant 'Osteria Cotto', Chinese food brand 'Mazing.A', and Pyongyang-style cold noodles and roast beef specialty restaurants 'Rosok', 'Pure Melange', 'Mezzanine', 'Bongo', 'Patti Patty', and 'Boutique Blooming'. 

SG Dainhill's flagship restaurant, 'Two-Bul-Deng-Shim' and the healthy restaurant 'Thunderbird' were transferred to the father's company, Samwon Garden, for capital injection.

Sales in 2023 were 13.5 billion won, down 16% from 16 billion won the previous year. Operating loss was 2.8 billion won in 2022 and 2.3 billion won last year, continuing a deficit for two consecutive years.

Net income also recorded a net loss for the second consecutive year, with a loss of -8.4 billion won in 2022 and -2.4 billion won in 2023.

Short-term borrowings amounted to 5.5 billion won, accrued expenses 740 million won, and total liabilities 8.5 billion won.

Looking at the detailed sales and cost of sales, food sales were 11.5 billion won, food cost was 4.6 billion won, and the cost of sales ratio was 40%. Alcohol sales were 1.3 billion won, and alcohol cost was 430 million won, and the cost of sales ratio was 33%. Merchandise sales were 710 million won, and the cost of goods was 97 million won, and the cost of sales ratio was 7.3%.

In 2023, advertising and promotional expenses were 1 billion won, employee salaries were 4.3 billion won, welfare expenses were 590 million won, research and development expenses were 5 million won, and donations were 10 million won. 

Looking at the current shareholder composition of SGDine Hill, CEO Park Young-sik owns 70%, and his wife Jo In-kyung and their daughter (2 years old) Madison own 30%. His wife Jo In-kyung is the CEO of 15eme and runs a fashion business. She also has 75,000 followers on Instagram.

SG Dine Hill was established on March 6, 2002 as Samwon R&C, and changed its name to SG Dine Hill in April 2007. The company engages in food and lodging, wholesale and retail, real estate, and service businesses, and is headquartered in Eonju-ro, Gangnam-gu, Seoul. Its affiliates include Benefits Co., Ltd. and Grand Central Hospitality Co., Ltd., and its other special affiliates include Samwon Garden Co., Ltd., Caviar Co., Ltd., SG&P Co., Ltd., Grace Development Co., Ltd., and Diston Development Co., Ltd.

In March 2020, the gourmet curation platform 'KAVIAR' was launched. CAVIAR has close to 200 food IPs in the domestic and foreign restaurant industry, ranging from popular restaurants through word-of-mouth on social media to old, established restaurants. It is also working with GS Retail, which recently participated in the investment, to sell CAVIAR RMR (Restaurant Meal Replacement) products through GS Retail's distribution network.

With existing investors Stonebridge Ventures and GS Retail joining, Danal, T-K Investment, and Woori Bank, the cumulative investment amount has exceeded 16 billion won.

Unlike general convenience foods (HMR), representative products include Samwon Garden's 'Seasoned Galbi Kkotsal', 'Boneless Galbitang', and 'Spicy Yukgaejang', as well as Jeju Island local restaurant 'Sanbang Restaurant's Milnaengmyeon and Ramyok's 'Gopchang Jeon-gol'. Caviar sales recorded 1.45 billion won in 2020, 17.6 billion won in 2021, 36 billion won in 2022, and 38 billion won in 2023.

However, there is still a long way to go in terms of profits. The operating loss in 2020 was at the level of 670 million won, but it increased to 3.14 billion won in 2022. Last year, it also recorded an operating loss of 3.685 billion won.

Samwon Garden has not yet revealed its exact business plan, but CEO Park hinted in an interview that the third overseas Samwon Garden store, a New York store, will open in early 2025. The first overseas store opened in Vietnam in December 2023, and the company plans to open a second overseas store under the name “Samwonjeong” in Vietnam within the year.

We repeatedly asked questions about the capital erosion, the sale of the two-horned sirloin to Samwon Garden, the use of research and development expenses and donations, and the use of the 8.5 billion won in debt, but there was consistently no response.