[Edaily Reporter Hyera Lee ] KOSDAQ-listed company KOYJ.CO.,LTD(121850), which was recently designated as a “monitored stock,” has begun communicating directly with investors. While the company presented a strategy to improve its business fundamentals—including plans to normalize its existing core business and focus on advanced materials and resource recycling—it failed to provide a concrete answer regarding how it intends to address the risk of delisting in the second half of the year, which is the primary concern for investors.
On the 23rd, KOYJ.CO.,LTD held an investor relations (IR) briefing for individual and institutional investors at the Financial Investment Education Center in Yeouido, Seoul. CEO Jo Jae-hyung attended the briefing, where he presented the company’s current business status and new growth strategies for about an hour before participating in a Q&A session with shareholders.
KOYJ.CO.,LTD has grown primarily by manufacturing optical films for displays. However, the company experienced a downturn in its core business due to a combination of factors, including a slump in Chonbang industries such as TVs and rising prices of naphtha, its key raw material.
Along with the deterioration in earnings, the stock price has experienced prolonged volatility, and as of today, the market capitalization has shrunk to the 8 billion won range.
Consequently, following its designation as a “stock under investment caution” last March, the company was classified as a “monitored stock” on the 5th of this month after falling below the 30-trading-day listing maintenance threshold (market capitalization of 15 billion won). Under the strengthened delisting criteria, if the company fails to restore its market capitalization to at least 20 billion won by August 31, it will face delisting; therefore, a rebound in its stock price is urgently needed.
On that day, KOYJ.CO.,LTD closed at 1,641 won, down 9 won (0.55%) from the previous trading day. To achieve a market capitalization of 20 billion won, the share price must recover to approximately 4,000 won per share.
On the same day, the company announced plans to normalize its optical film business and cultivate new growth engines: the SOC (Spin-On Carbon) advanced materials business for rechargeable batteries and semiconductors, as well as high-value-added wastewater treatment and resource recycling.
CEO Cho stated, “We are treating this year as the first year of our earnings turnaround and are accelerating the expansion of high-margin businesses,” adding, “We will achieve a return to profitability based on the acquisition of the wastewater treatment business and the commercialization of our advanced materials business.”
The company explained that its existing optical film business has been showing improved performance and expanding its overseas customer base since the first quarter. Furthermore, having completed the acquisition of “Lee Kyung E& Co., Ltd.—an industrial wastewater treatment company with decades of experience—in May, the company plans to fully launch its resource recycling business starting in the second half of the year.
However, the briefing left some attendees disappointed, as no clear action plan, specific timeline, or concrete figures were presented regarding measures to address the risk of delisting in the second half of the year.
When a shareholder asked about measures to boost the stock price, CEO Cho replied, “We are reviewing all possible options. Over the past four years, we have invested approximately 5 billion won by participating in five rights offerings, and last year we also repurchased our own shares, but there was no market response.” He added, “We are reviewing various options regarding what steps to take under the current circumstances, and we will use this briefing as an opportunity to gauge market reaction before finalizing our action plan.”
When asked about the possibility of a rights offering to raise additional funds, he replied, “It is certainly possible if it protects shareholder value and we can find a partner to collaborate with. We are willing to set a course even if it dilutes the largest shareholder’s stake,” but he drew a line, adding, “There are currently no specific companies under consideration.”
As the Q&A session continued, the atmosphere became somewhat heated at times.
Meanwhile, KOYJ.CO.,LTD recorded an operating loss of 8.1 billion won and a net loss of 11 billion won on a consolidated basis last year.