[At a Crossroads for Listed Companies] Joheunsaramdeul Sets High Rights Offering Price with Limit-Up

[Asia Economy Reporter Jang Hyowon] The underwear specialist company, Joheun Saramdeul, has set the final issuance price for its paid-in capital increase at approximately 84% of the current stock price. On the 18th, the stock price hit the upper limit, resulting in a relatively high issuance price.

According to the Financial Supervisory Service's electronic disclosure on the 20th, Joheun Saramdeul announced that the final issuance price for the paid-in capital increase was fixed at 1,740 KRW. Accordingly, Joheun Saramdeul will raise a total of 34.8 billion KRW through the public offering. The issuance price was calculated by comparing the first and second issuance prices with the reference stock price.

Previously, on August 28 of last year, Joheun Saramdeul decided on a paid-in capital increase worth 56 billion KRW through a rights offering followed by a general public offering of forfeited shares. A total of 20 million new shares will be issued, representing a 67% increase compared to the existing total issued shares of 29,908,224. The planned issuance price per share was 2,800 KRW.

After deciding on the capital increase, the first issuance price was set at 2,485 KRW on September 30 of last year. Accordingly, the amount to be raised was adjusted to 49.8 billion KRW. The issuance price was calculated by taking the weighted arithmetic average stock price from August 28 to September 27 of last year and the stock price on the base date (September 27), averaging them arithmetically, and then applying the capital increase ratio and a 30% discount rate.

The second issuance price was calculated as 1,740 KRW on the 19th. This price was derived by averaging the weighted arithmetic average stock price from September 12 to 18 and the stock price on the 18th, then applying a 30% discount.

The confirmed issuance price on the same day was also set at 1,740 KRW. The confirmed issuance price was determined by taking the lower amount between the first and second issuance prices and comparing it with 60% of the weighted arithmetic average stock price over the last three trading days (1,475 KRW), then selecting the higher value. Ultimately, the second issuance price became the final price per share for the paid-in capital increase.

The confirmed issuance price of 1,740 KRW is about 84% of Joheun Saramdeul’s stock price of 2,070 KRW as of 10:30 AM that day. This means the issuance price was set higher than the original 30% discount rate.

The reason for the high confirmed issuance price is that Joheun Saramdeul’s stock price surged sharply when the issuance price was calculated. On the 18th, Joheun Saramdeul’s stock hit the upper limit. That day was the base date for the issuance price calculation. Meanwhile, the KOSDAQ index fell sharply by 5.75% on the same day.

If the stock price had not hit the upper limit on that day and had instead been around the closing price of 1,960 KRW on the 17th, the confirmed issuance price would have been estimated at about 1,372 KRW. This would have reduced the total capital increase amount to approximately 27.4 billion KRW.

The sharp rise in stock price is interpreted as a reaction to Joheun Saramdeul’s recent announcement of entering the hygiene products market, including masks and hand sanitizers, amid the COVID-19 situation. On the 17th, the company also distributed materials stating that mask sales were strong, supply was increasing, and they were expanding overseas.

However, it has been confirmed that Joheun Saramdeul has only formed a strategic partnership with a mask company and does not yet have concrete business plans. Among the partner companies, Dermal Korea is an OEM manufacturer of mask packs, not masks.

The masks reportedly sold by Joheun Saramdeul amount to about 4,000 units, valued at approximately 18 million KRW at market price. Even with increased supply, expected sales would be around 40 million KRW. Due to government policies limiting profit margins, it is uncertain whether this will significantly contribute to actual earnings.

Additionally, the sales contract for masks and hand sanitizers with the overseas ABG Group is still under discussion, and specific export volumes have not been determined.

Regarding this, a Joheun Saramdeul representative stated, “The mask and hand sanitizer business was entered with the judgment that it could generate long-term performance,” and added, “We did not intentionally distribute materials on the day the final issuance price was set.”

This content was produced with the assistance of AI translation services.