[Post-IPO] NanoCMS, High Employee Stock Ownership Association Evaluation Yield but...

Listed on KOSDAQ in March last year at a public offering price of 20,000 KRW
2% of shares allocated to employee stock ownership association
Stock price surged due to virus purchase and lamp development

[Asia Economy Reporter Hyungsoo Park] The lock-up period for the shares held by the NanoCMS employee stock ownership association is approaching its end in one week. Last year, NanoCMS's stock price surged following the development news of the 222nm far-ultraviolet lamp, resulting in a high valuation gain for the employee stock ownership association. However, since only 2% of the public offering shares were allocated to the employee stock ownership association at the time of listing, the scale of the valuation gain is expected to be only a few hundred million won.

According to the financial investment industry on the 2nd, NanoCMS's stock price has fallen 33.7% since the beginning of this year. It closed at 76,200 won at the end of last year, but the current stock price remains around 50,000 won. Even considering that the KOSDAQ index fell 14.0% during the same period, the return is poor compared to the market.

NanoCMS is a company that produces security printing pigments used in banknotes, passports, driver's licenses, and resident registration cards through nano-based chemical structure design. It possesses core technology in the field of light-controlling materials. The company is developing materials with anti-counterfeiting effects.

After listing on March 9 last year at a public offering price of 20,000 won, the stock price remained below the offering price for about five months. Afterwards, the stock price rose sharply from August last year. The news that the 222nm far-ultraviolet lamp demonstrated coronavirus inactivation effects through research papers influenced the stock price.

Ultraviolet light can damage the skin when directly exposed to the human body. Compared to 254nm, the 222nm far-ultraviolet lamp has lower toxicity, allowing it to be used while people are active. It can be used in public places for coronavirus sterilization or for hygiene management even while food factories are operating. The stock price, which was below 20,000 won, surpassed 100,000 won within two months. The Korea Exchange inquired about the reason for the rapid rise through a disclosure request, but the company responded that there was no important information to disclose separately related to market fluctuations.

On October 1 last year, the stock price, which once soared to 124,700 won during trading hours, began to retreat as selling pressure for profit-taking emerged. This appears to be a reaction to the stock price rising about sevenfold in a short period.

NanoCMS's performance failing to meet market expectations also affected the stock price. NanoCMS recorded sales of 4.1 billion won and an operating loss of 1 billion won last year. Sales decreased by 3.6% compared to the previous year, and the loss size increased. After the third-quarter earnings announcement last year, Kiwoom Securities estimated that NanoCMS's sales would slightly increase compared to the previous year but adjusted the expected sales to about half of the first half estimate of 9.7 billion won.

On November 29 last year, NanoCMS issued convertible bonds (CB) worth 17 billion won to domestic institutional investors. The bonds have no coupon interest or maturity interest, and the conversion price is 78,200 won. The conversion price adjustment due to stock price decline can go down to 54,800 won. At the time of the convertible bond issuance, NanoCMS's stock price was above 90,000 won, so the company succeeded in raising operating funds without additional financial costs. It also secured a call option to prevent dilution of the major shareholder's stake.

However, the stock price has steadily declined since the new year, falling to around 50,000 won. Since there are about nine months left until the conversion period, it is difficult to predict whether conversion will occur.

Although the stock price has fallen significantly from its peak, it is still higher than the public offering price. Employee stock ownership association members can sell their shares once the one-year lock-up period ends. The current valuation gain is 470 million won, with a valuation return exceeding 140%. At the time of listing last year, the employee stock ownership association received 16,000 shares of the public offering. According to the Labor Welfare Act, they can receive shares within 20% of the public offering volume. Considering that the company has about 20 employees, only 2% of the public offering volume was allocated to the employee stock ownership association.

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