Pulmuone Co.'s (017810) China subsidiary continues to deliver solid earnings growth despite the local economic slowdown. The company's strategy of diversifying beyond its traditional tofu-centric business into frozen foods and noodles is credited with driving the revenue expansion.
According to industry sources, Pulmuone's China unit posted estimated sales exceeding 100 billion won last year, up more than 15% from the previous year. The subsidiary recorded 105.2 billion won in 2022 but saw revenue decline to 81.5 billion won in 2023 amid weak domestic consumption, remaining in the 80 billion won range in 2024. However, growing interest in K-food last year, along with increased sales of frozen products like kimbap and noodles such as udon, drove a sharp improvement in performance.
The frozen segment, including kimbap and hot dogs, saw sales surge 72% last year. The strong performance was largely driven by frozen kimbap launched in September 2024 reaching full-scale distribution. The "Korean-style Tuna KimBap" sold at Sam's Club, a major Chinese retail channel, generated over 10 billion won in sales over approximately one year.
Expectations for improved profitability are rising as the company shifted to original equipment manufacturer (OEM) production at a local factory for frozen kimbap starting in the second half of last year. "Unlike before when we produced in Korea and exported frozen products, switching to direct production at our Xiamen factory has enabled us to reduce costs by approximately 40%," the company said.
Sales in the ambient noodle segment, centered on udon and naengmyeon (cold noodles), also jumped 81%. The company attributes this to strong consumer response driven by convenient preparation and restaurant-quality taste. Pulmuone is expanding its product lineup to include jjajangmyeon (black bean noodles) and kalguksu (knife-cut noodles) alongside its flagship inari udon.
Headquarters management has shown heightened interest in the China subsidiary. Pulmuone CEO Lee Woo-bong visited the Beijing noodle factory in late January ahead of the local launch of "Kimchi & Fish Cake Udon Noodles," sampling products and assessing market conditions.
This growth trajectory is reshaping the China market's revenue structure, which had previously concentrated on tofu and chilled pasta. The share of frozen foods and noodles in total sales expanded from 26.5% in 2023 and 25.9% in 2024 to 32.9% last year. Industry observers note the company has reduced dependence on single product categories while establishing a foundation for stable growth.
"This year, we plan to continue expanding sales focused on frozen foods and noodles while sequentially launching locally tailored new products such as gnocchi," a Pulmuone spokesperson said. "We also plan to introduce new flavors of frozen kimbap this month."