Dongwon Industries Expands Accessibility with 1/5 Stock Split... Enhances Shareholder Value

[Asia Economy Reporter Jang Hyowon] Dongwon Industries, which is preparing for a merger with its holding company, will proceed with a stock split. Starting with this, Dongwon Industries plans to enhance shareholder value.

According to the Financial Supervisory Service's electronic disclosure on the 27th, Dongwon Industries held an extraordinary general meeting of shareholders on the 14th and passed the merger proposal with the current holding company, Dongwon Enterprises. The governance structure is being reorganized with Dongwon Industries as the focal point.

Along with this, the stock split proposal was also approved at the shareholders' meeting on the same day. The existing face value of 5,000 KRW will be divided into 1,000 KRW. As of the previous day, Dongwon Industries' stock price was around 230,000 KRW, and after the 1:5 stock split, it is expected to trade at 40,000 to 50,000 KRW per share.

With the significant reduction in the price per share, investors' psychological burden is expected to decrease, activating trading. In fact, Naver saw its trading volume more than double after a 1:5 stock split in 2018. Samsung Electronics also experienced increased trading volume after a 1:50 stock split in the same year. This year, Asia Cement, Hanmi Semiconductor, and Shinsegae Group stocks are also undergoing stock splits.

Dongwon Industries' average daily trading volume over the past month is 2,295 shares, and the daily trading value remains around 500 million KRW. With a lower price per share and increased trading volume, a positive impact on the stock price is anticipated.

Stock splits are one of the representative shareholder-friendly policies adopted by global companies. Recently, Amazon and Tesla in the U.S. executed stock splits at ratios of 1:20 and 1:3 respectively, and Japan's Nintendo decided to split its stock 1:10 for the first time in 31 years to improve investor accessibility.

Dongwon Industries plans to continue voluntary efforts to enhance its undervalued corporate value, starting with the stock split decision. The merger with the holding company Dongwon Enterprises is also interpreted as part of enhancing corporate value. By reorganizing the governance structure simply and intuitively centered on Dongwon Industries, the group aims to strengthen management efficiency and enable swift decision-making.

Dongwon Industries achieved its best-ever performance in the first half of this year. On a consolidated basis, sales and operating profit for the first half reached 1.6723 trillion KRW and 179.6 billion KRW, increasing by 24.2% and 41% respectively. Net profit also rose by 51.2% to 133.5 billion KRW.

Based on this performance growth, Dongwon Industries is focusing on securing new growth engines. At the group level, efforts are being made to innovate logistics systems such as secondary battery materials and smart ports, and in the food sector, investments are being made in projects like 'salmon land-based aquaculture' to diversify fish species, aiming to achieve early results.

A Dongwon Industries official stated, “We plan to quickly complete the governance restructuring through the merger of the group’s holding companies and carry out activities that can guarantee sustainable growth. Just as we listened to and accepted shareholders' opinions during the process of determining the merger ratio, we will explore various policies that can enhance shareholder value together.”

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