[Edaily Marketin Reporter LEE GEON-EOM ] Daelim Trading ( DaelimTrading(006570)), a company specializing in construction materials, is facing the threat of delisting due to chronic losses and deteriorating financial health. Observers note that structural management failures—going beyond a mere construction industry slump—have led to a long-term decline in corporate value, and the company is on the verge of falling below the 30 billion won market capitalization threshold, which serves as the government-led criterion for delisting struggling companies.

According to the financial investment industry on the 17th, DaelimTrading’s market capitalization, based on the previous day’s closing price, stood at 31.3 billion won. Considering that the government recently announced—as part of its stock market “value-up” guidelines—that it would encourage the smooth exit from the market of “zombie companies” that fail to meet listing maintenance requirements, such as having a market capitalization below 30 billion won, DaelimTrading has effectively reached the delisting threshold.

The Financial Services Commission and the Korea Exchange announced the “Reform Plan for the Swift and Strict Delisting of Troubled Companies” last February and decided to move up the implementation date of the 30 billion won market capitalization delisting threshold—originally scheduled for 2028—to January of next year.

In particular, to prevent companies from using temporary stock price manipulation to avoid delisting after being designated as a “monitored stock,” the detailed requirements were significantly tightened: companies that fail to meet the “45 consecutive trading days or more” criterion out of 90 trading days will be immediately delisted.

Market observers point out that the decline in DaelimTrading’s market capitalization is the result of long-term management failures, rather than a temporary downturn in business conditions. While DaelimTrading cites the deterioration of the construction industry as the main cause of its poor performance, an examination of its financial trends over the past decade (2015–2025) reveals that the company recorded losses in more years than it posted profits.

Cumulative operating losses during this period alone amounted to 15.6 billion won. In the first quarter of this year, the company also posted an operating loss of 600 million won and a net loss of 1.3 billion won. Analysts suggest that the cumulative effect of a decade-long structural decline in profitability has eroded market confidence, leading to the decline in market capitalization.

In particular, interest expenses significantly exceeded operating profit in as many as nine of the past ten years. In effect, the company has remained in a classic “zombie company” (marginal firm) state for an extended period, unable to cover even the interest on its debt with the money earned from its core business.

As the prolonged slump in performance has continued, its financial indicators have also crossed into dangerous territory. As of the end of the first quarter of this year, DaelimTrading’s total debt stood at 85.6 billion won. Of this amount, short-term debt with maturities of less than one year totaled 76.8 billion won, accounting for approximately 90%. The debt-to-total-assets ratio also stands at 54.8%, far exceeding the generally accepted appropriate level of 30%.

In contrast, the company’s cash and cash equivalents—which it can access immediately—amount to only 2.4 billion won. Net debt, calculated by subtracting cash equivalents from total debt, stands at 83.1 billion won. The net debt-to-total-capital ratio has soared to 232.4%. While cash flow from operating activities in the first quarter amounted to only 350 million won, the company spent 1.3 billion won on interest expenses alone during the same period. Analysts assess that the company has reached a critical financial juncture where it cannot even cover interest payments with the cash generated from operations.

Risks related to subsidiaries and related parties are also heightening management uncertainty. Major subsidiaries, including Living Star Co., Ltd. and the Indonesian subsidiary (P.T. DAELIM INDONESIA), posted net losses of 500 million won and 1 billion won, respectively, in the first quarter, weighing on consolidated earnings. Furthermore, the company bears potential financial burdens due to providing payment guarantees and deposit collateral worth several billion won related to credit transactions and borrowings of its parent company, D&D Partners.

Consequently, analysts note that a vicious cycle—in which the loss of competitiveness in its core business leads to increased borrowing and higher financial costs—has been repeating itself for the past 10 years. Given the company’s current cash generation capacity, which is barely sufficient to cover interest payments, the prevailing view is that it will be difficult to improve its financial structure in the short term without an infusion of external funds or asset sales.