[After CB Issuance] Jungang D&M Begins Conversion Request... Profit Expectations Rise 'Gently'

[Asia Economy Reporter Yoo Hyun-seok] Investors who acquired convertible bonds (CB) of Jungang D&M can now expect an evaluation return of approximately 150% after about a year.

According to the Financial Supervisory Service's electronic disclosure system (DART) on the 8th, Jungang D&M announced on the 30th of last month and the 6th of this month that it will convert the 8th series CB into stocks. The amounts are 3.8 billion KRW and 5 billion KRW, respectively. The scheduled listing date is the 20th of this month.

The 8th series CB faced many twists and turns before issuance. The initial announcement to issue the CB was made in January last year, but the payment date kept changing, and it was only issued in September last year. The issuance amount decreased from the original 10 billion KRW to 8.8 billion KRW. The nominal interest rate is 2.0%, and the maturity interest rate is 5.0%. The conversion request period is from the 29th of last month until August 29, 2023. The issuer is Ilias. The initial conversion price was 593 KRW but was lowered to 585 KRW due to a paid-in capital increase and other factors.

The company raised funds to use for operating expenses such as raw material purchases, labor costs, and general expenses. According to the semi-annual report for the first half of this year, all 8.8 billion KRW raised was invested in operating funds.

As Jungang D&M's stock price recently rebounded, the expected returns for CB investors have also increased. This is attributed to expectations regarding the change of the largest shareholder and the progress of new business ventures. Jungang D&M decided on a third-party allotment paid-in capital increase in August last year. Amid continuous changes in the payment date and changes in the issuance target, eight amended reports were submitted. Ultimately, the issuance target changed from TY Eco to HF Networks.

After the change of the largest shareholder, Jungang D&M has been advancing new businesses. In January, it newly added civil engineering and construction work, paving work, electrical work, and railway and track work to its business items. It also added "smart farm development and manufacturing." Additionally, in July, it participated in a paid-in capital increase of Sangji Kyleum and became the largest shareholder, further strengthening its business.

For these reasons, Jungang D&M's stock price rose to 3,250 KRW in March. However, the stock price has continuously declined since then, falling to 1,445 KRW. Despite the continuous decline in stock price, CB investors can expect high returns. If Jungang D&M's stock price is maintained until the 30th, an approximate return of 147% can be expected.

Jungang D&M was established in April 1999. When it was listed on the KOSDAQ market in 2001, it engaged in telecommunications equipment, PVC products and building materials manufacturing, and other household goods distribution businesses. In 2017, it diversified its business area into PVC manufacturing by absorbing Jungang Living Sash. In May 2019, it changed its name from Jungang Living Tech to Central Bio, and since June, it has been operating under its current name.

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