Suh Min-jeong – the elder daughter of Chairman Suh Kyung-bae of South Korean beauty giant Amorepacific and the prime candidate to inherit the company – recently went into an abrupt yearlong leave of absence, fueling speculation about the company’s business strategy and succession scheme.

Having already liquidated all of her stakes in Etude and Espoir, the two budget brands affiliated with the beauty giant, the 31-year-old heiress also donated half of her stake in Innisfree, one of the most profitable brands, to the company’s public trust.

Even though company officials denied putting too much emphasis on her absence, calling it a “personal matter,” industry watchers say it is possible that her father, Chairman Suh, could be sparking a succession race among his two daughters.

After graduating from Cornell University with a major in economics in the US, the elder daughter Suh worked as a consultant for US management consulting firm Bain & Company starting in 2015. She then joined Amorepacific in 2017, but only for a six-month stint before leaving for China.

After completing her Master of Business Administration at China's Cheung Kong Graduate School of Business, she re-joined Amorepacific in 2019 to oversee the company’s luxury brands.

In the meantime, little is known about her younger sister Suh Ho-jeong. According to Amorepacific, other than the fact she was born in 1995, all personal information is currently withheld from the public.

In 2006, the chairman bestowed his eldest daughter with a total of 2,412,710 preferred shares of Amorepacific Group, the holdings company of Amorepacific.

Six years later, she additionally received 44,450 shares (18.18 percent) of Innisfree and 181,580 shares (19.52 percent) stake in Etude. In 2015, Espoir spun off from Etude, and she ended up holding a 19.52 percent stake in Espoir as well.

In 2016, after her preferred shares received in 2006 were converted into common shares, she became the second-largest shareholder of Amorepacific Group with total share of 2.66 percent in the holdings company.

Riding high on the K-beauty boom in the following years, the market value of her stakes soared, making her one of the nation’s stock riches with stock assets worth some 212 billion won ($162 million) in total in 2019.

However, the golden times did not last long, as the company’s thriving Chinese business was hit by the COVID-19 pandemic and geopolitical tensions.

During Etude and Espoir's capital reduction held last year following the brands' poor financial health, Suh liquidated her entire stake in Etude and Espoir. In June, Suh decided to further reduce her stake in the company, by donating 9.5 percent of her shares in Innisfree to the Suh Kyung-bae Foundation, Amorepacific's public trust. Suh now holds 8.69 percent in Innisfree.

Meanwhile, in May, the chairman bestowed 1,728,000 preferred shares of Amorepacific Group to his younger daughter, ramping up her share in the company from 0.16 percent to 2.63 percent. The sisters now only have a 0.03 percent difference in their stakes in Amorepacific Group.

"Corporate leaders must demonstrate vision and management performance to employees and stakeholders," Kim Gye-soo, a business professor at Semyung University, told The Korea Herald.

"For quite some time, Amorepacific's performance has dwindled (after the eldest daughter joined the company). It could be that Chairman Suh's intention is to give a chance to his younger daughter," he said.

Amorepacific posted consecutive deficits since 2022 before it returned to the black in the second quarter this year on bolstered global sales.

In 2022, Amorepacific Group's net profit came in at 149.2 billion won, down 48.9 percent on-year, while its revenues dropped 15.6 percent to 45 trillion won. Operating profit fell 23.7 percent to 271.9 billion won.

"Suh Min-jung's shares of Innisfree, the 'cash cow' brand of Amorepacific, were bought back by Innisfree from the Suh Kyung-bae Foundation on July 27," Kim added.

"The shares still remain intact, and it could be that Chairman Suh is gauging his daughters' business potential -- with the shares of one of the subsidiaries of Amorepacific that raise most profits," he said.

Currently, Innisfree stands as one of Amorepacific's most profitable cosmetics brands. Innisfree's cumulative operating profit in 2022 stood at 32.4 billion won, while Etude posted operating profits of 5 billion won. Meanwhile, Espoir posted operating profits of 2.6 billion won during the same year.

Other experts say in addition to Chairman Suh obliquely fueling competition between his two daughters, it could be that Amorepacific is aiming to redirect its sales tactic.

"The subsidiaries that the chairman passes down to his successor generally tend to be the 'main' subsidiaries within the company. If (the elder daughter) is reducing her stake in Innisfree, Etude and Espoir, it could connote that Chairman Suh is redirecting his focus from mid- to low-priced cosmetics brands to elsewhere, as its sales of such products have been sagging lately, especially in the Chinese market," said an official from a local accounting firm on the condition of anonymity.

However, Amorepacific refuted such a theory, saying that the elder daughter's recent leave of absence is a personal matter. The company added the younger daughter has no immediate plans to join the company.

"(The elder daughter's) decision to donate her share of Innisfree to the foundation was also a private decision made in regard to individual property. The move is not directly related to the company," an Amorepacific official said.

"Innisfree decided to buy back Suh Min-jeong's shares in July from the foundation, for the sole purpose of enhancing shareholder value. The matter is not related to Suh Min-jeong, or any corporate tactics," he added.