[Edaily Marketin, Reporter Kim Yeon-seo] Chong Kun Dang Holdings (A+), the holding company of the Chong Kun Dang Group, is set to issue up to 1000억 won in public corporate bonds. The group’s scale is expanding and profitability is improving thanks to sales of Wegovy, an obesity treatment introduced by its subsidiary Chong Kun Dang, which is expected to have a positive impact on investor sentiment. However, as net debt continues to rise due to the burden of large-scale investments—such as the construction of a bio-complex R&D complex—managing financial stability going forward is seen as a key challenge.

According to investment banking (IB) industry sources on the 18th, Chong Kun Dang Holdings plans to issue corporate bonds totaling 600억 won on the 1st of next month. The issuance is structured into two tranches: a 2-year tranche worth 300억 won and a 3-year tranche worth 300억 won. The company has left open the possibility of increasing the issuance amount to a maximum of 1,000억 won, depending on the results of the bookbuilding process.

The bookbuilding process for institutional investors will take place on the 24th of this month. KB Securities and Samsung Securities are serving as lead underwriters. The target yield range for the public offering has been set at -30 to +30 basis points (bps; 1 bp = 0.01 percentage points) relative to the yield of ‘A+’-rated private bonds as assessed by a private bond rating agency.

Chong Kun Dang Holdings is the holding company of the Chong Kun Dang Group, with major subsidiaries including Chong Kun Dang, Kyungbo Pharmaceutical, Chong Kun Dang Bio, and Chong Kun Dang Health. In addition to managing its subsidiaries, the company is responsible for new investment functions such as research and development of biopharmaceuticals.

Korea Ratings and NICE Credit Rating have assigned Chong Kun Dang Holdings a credit rating of “A+ (Stable).” They assess that the company maintains excellent levels of profitability and financial stability, particularly in its pharmaceutical division. While increased investment burdens are cited as a concern, they believe the company can manage its financial stability based on its strong operating cash flow generation.

Korea Ratings recently assessed that the Chong Kun Dang Group is continuing to show stable revenue growth on a consolidated basis. “Wegovy,” an obesity treatment introduced by its subsidiary Chong Kun Dang in October 2025, recorded sales of 488억 won in the first quarter of 2026. Driven primarily by sales growth at Chong Kun Dang, consolidated revenue reached 6880억 won, a 6.2% increase compared to the same period last year.

Profitability also improved. Han Ki-pyeong analyzed that reduced marketing expenses resulting from changes in Jongkundang Health’s sales channels, along with base effects at Kyungbo Pharmaceutical, contributed to the improvement in the operating profit margin. Kyungbo Pharmaceutical temporarily suspended operations at its production facilities in the first quarter of 2025 due to plant renovation work. Consequently, the operating profit margin on a consolidated basis for the first quarter of 2026 rose by 1.0 percentage points year-over-year to 4.8%.

However, the financial burden resulting from expanded investment remains a factor to monitor. Although consolidated EBITDA increased in 2025, inventory burdens grew, particularly at Chong Kun Dang and Chong Kun Dang Bio. In addition, capital expenditures remained higher than in previous years—including land purchases for the construction of a bio-complex R&D complex—causing net debt to rise by 1419억 won compared to the end of the previous year.

Working capital and investment burdens have persisted into this year as well, causing consolidated net debt to rise to 5049억 won as of the end of March. However, financial leverage remains at an excellent level as the company continues to strengthen its capital base through net income generation. As of the end of March, the consolidated debt-to-equity ratio stood at 98.4%, and the debt dependency ratio was 29.8%.

Kim Jin-hong, a senior researcher at Korea Ratings, commented, “With Jonggundang Health continuing to see improved profitability due to its sales channel transition, and Jonggundang continuing to expand its business scale through the active introduction of new products, the group is expected to maintain excellent profit-generating capacity.”

He continued, “However, due to funding requirements associated with planned large-scale capital expenditures—such as the construction of Chong Kun Dang’s bio-complex R&D complex—the consolidated ‘net debt/EBITDA’ ratio is expected to rise to around 2.5 times in 2026–2027,” “It will be necessary to monitor the extent of profitability fluctuations resulting from the expansion of new product launches and R&D expenses, as well as the scale of annual capital expenditures and trends in financial stability,” the analyst added.