DB HiTek Emphasizes Shareholder-Friendly Approach Ahead of AGM... "Dividend Payout Ratio Policy Set at 10%"

Shareholders Meeting Scheduled to Discuss Fabless Physical Division Proposal

DB HiTek plans to propose a motion at the regular shareholders' meeting on the 29th to spin off its brand business unit, which operates as a fabless semiconductor design company, amid concerns over shareholder backlash, and is strengthening shareholder-friendly policies.

On the 28th, DB HiTek stated, "We will actively pursue shareholder-friendly policies in conjunction with the brand business unit spin-off," and added, "The spun-off subsidiary has no plans to be listed." This was in response to shareholders' concerns that the newly established subsidiary after the spin-off might be listed on the stock market, potentially lowering corporate value, which the company dismissed.

DB HiTek explained, "If the subsidiary is to be listed within five years after the spin-off, the parent company's articles of incorporation will specify that a special resolution at the shareholders' meeting is required to proceed with the listing of the newly established company," and added, "Furthermore, for listings after five years, we plan to include a clause in the subsidiary's articles of incorporation mandating a special resolution at the parent company's shareholders' meeting when pursuing a listing."

In addition, at least one inside director from the parent company will participate as a member of the subsidiary's board of directors, and the parent company's audit committee will be granted authority to investigate the subsidiary's management status. The parent company's spin-off business report will disclose major changes in the subsidiary, establishing a monitoring system for the subsidiary's management status.

They also revealed specific plans to enhance shareholder value going forward. DB HiTek increased the dividend per share for 2023 to 1,300 KRW, corresponding to a dividend payout ratio of 10%, and pledged to maintain a 10% payout ratio policy in the future. Additionally, "At the board meeting held on the 7th, we resolved to proceed with a 100 billion KRW share buyback," and explained, "We are implementing an internal policy to expand the share buyback ratio to 10% within this year and increase it to 15% in 2024, maintaining that level continuously."

Meanwhile, DB HiTek reiterated that the purpose of the brand business unit spin-off is "to separate the foundry (manufacturing) and brand (design) businesses, which have conflicting interests with customers, aiming for mutual growth to take another leap forward."

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