[Park Soo-nam’s IR Report 10] The Dark Side of Rapid Growth: APR CEO Byung-hoon Kim’s Structural Risks

[CEONEWS = Reporter Park Soo-nam]
In 2024, a company emerged like a comet in the K-beauty industry: APR. Led by its brands Medicube and the AGE-R beauty devices, APR has aggressively expanded into global markets, surpassing 700 billion KRW in revenue and 100 billion KRW in net profit within just two years of going public. Its founder and CEO, Byung-hoon Kim, still in his mid-30s, has quickly risen to billionaire status. However, a company’s true value lies not in profit, but in sustainability.

Interest Rate Bomb and Leverage Pressure

APR’s financial statements shout “growth,” but behind that lie significant interest rate risks and liquidity instability. On a consolidated basis, total liabilities surged from 90.3 billion KRW in 2023 to 241.6 billion KRW in 2024. Non-current liabilities alone grew more than tenfold. While this was driven by asset expansion and increased leverage, the root of the problem is structural. Most of APR’s debt is based on floating interest rates, meaning that any rate hikes could impose a heavy burden on operations.

Furthermore, APR’s capital replenishment and profit deferral strategies are not conservative enough, especially in light of its rapid overseas expansion and aggressive facility investments. This could eventually lead to “growth fatigue.”

In 2025, APR executed buybacks and dividends totaling 220 billion KRW. With a payout ratio of 55% of adjusted net profit, this reflects an aggressive shareholder return policy—but it could also undermine future R&D investment and crisis reserves. Given that CEO Kim and other key executives hold over 33% equity, the high dividend policy may essentially be a vehicle for major shareholder cash-outs. From an investor’s point of view, the company risks becoming a “cash-out tool” rather than a growth engine.

‘Appearance of Checks’ vs. ‘Absence of Control’

APR operates under a single ownership structure. Founder Byung-hoon Kim exercises near-absolute influence with around 32% equity, and real management decisions are centralized around him. Although the company has a seemingly advanced governance system—outside director majority, separation of board chair, and established committees—the actual effectiveness of these measures is questionable.

A related-party lending scandal during the IPO process was an early sign of structural risks. APR funds were used to finance Kim’s private company, revealing internal control failures and omissions in disclosures. Though the IPO was delayed and internal reviews improved, the cultural issues persisted. Additionally, all three outside directors are accounting professionals, revealing a lack of diversity in governance perspectives. This is a shortfall in offering comprehensive advice across consumer protection, international distribution, and digital marketing.

An even bigger issue is the absence of a succession plan. The company’s own governance report admits there is no CEO succession strategy. This is not merely a board-level concern—it directly impacts operational continuity. APR today is, effectively, run by one individual. If the person is more critical than the system, then the person becomes the biggest risk.

Behind Product Trust Lies Consumer Risk

APR’s brand success rests on hit products like Medicube cosmetics and AGE-R devices. However, this has created a risky concentration in revenue structure. As of Q1 2025, cosmetics accounted for 62% of sales and devices 34%. The device category, in particular, is subject to seasonal and product-cycle volatility. Without continued follow-up product development, growth could stagnate.

From the consumer’s point of view, more severe issues are emerging. Counterfeit products from China are on the rise, along with growing consumer harm. Fake products causing skin troubles or containing unidentified ingredients represent health risks, not just distribution issues. While APR emphasizes crackdowns, its monitoring of distribution channels and global IP protection strategies remain insufficient.

In the U.S., many users have reported side effects from using APR’s LED and RF devices, including skin irritation and pain. The company’s response has been lukewarm, mainly offering refunds—falling short of global consumer protection standards. This could damage brand trust. APR has already been penalized by Korea’s Ministry of Food and Drug Safety and lost a court case over advertising claims, underscoring the need for transparency and accountability in both marketing and product quality.

Trust Capital Is More Important Than Assets

APR is, on the surface, a successful company. But if the foundation supporting that surface is weak, the success may be fleeting. For APR to solidify itself as a true global K-beauty leader, the following reforms are essential:

1. Reduce financial leverage and transition to cash-flow-based management. Securing cushion assets for future risks should take precedence over buybacks or dividends.

2. Improve governance and establish a CEO succession plan. These are no longer optional.

3. Upgrade systems to align with global standards in product safety and consumer protection.

Investors don’t just look at numbers—they look at direction and sustainability. Consumers remember experience, not marketing. Now is the time for APR to acknowledge the shadow of its growth and confront its underlying risks head-on. A company that ignores risk is helpless in a crisis. A company that manages risk can turn even recessions into opportunities. The question is: can APR choose the latter path?