[KOSDAQ Star] Time-honored Commax rides IoT boom

Commax, a developer of home automation systems, was recently named one of the six “time-honored” companies by the state-run Small and Medium Business Administration for maintaining its business for 49 years in the country where the average business life cycle for small and medium manufacturers is only 11 years.

The SMBA said while the US has 12,780 companies that are more than 100 years old, South Korea has only seven.

Among companies with more than 45 years of business history, the organization picked six including Commax that outperform other SMEs in terms of its sales, job creation and R&D spending.

The revenue of Commax, a combination of Communication and Maximization, is 20 times bigger than the average of its peer group of communication equipment manufacturers, according to the SMBA. The company hires 199 employees, 8 times more than the average.

However, the company’s stock price has lingered between 5,000 won and 7,000 won.

“The stock price has been drifting sideways because our revenue growth was not that big,” an official at the company told The Korea Herald. “But we had a strong year in 2016 and we will do our best to maintain this momentum ahead of the 50th year anniversary in 2018.”

Attributing it partly to real estate and IoT booms, the company said its sales and net profit jumped by 15.4 percent on-year to 131.8 billion won ($115 million), and by 59.4 percent to 9.5 billion won, respectively, in 2016.

With IoT taking off globally, many construction companies and households have begun to embrace smart home systems that let them control plugs, gas valves, doors and other things via wall pads and smartphones.

The challenge for the company is whether or not it can maintain and expand its current domestic market share of 34 percent and increase exports to 120 countries in a fast-changing business environment.

“The business environment is more complicated than 10 years ago,” said Chief Operating Officer Byun Woo-suk, who is also the son of the founder Byun Bong-duk, said. “We did not expect then that IT companies and telecommunication operators would become partners or competitors.”

Byun said his company is developing IoT products with global competitiveness and aims to achieve 200 billion won in revenue by 2018 when the company turns 50.

By Park Ga-young (gypark@heraldcorp.com)