"Just One Month After Listing"... KNS Issues Warning on CB Issuance

Listed in December last year... 10% of total shares to be listed on January 12
Conversion price 18,000 won... CB investors expected to exceed 200% returns

Less than a month after listing on KOSDAQ, a warning has been issued regarding the issuance of convertible bonds (CB) by KNS. The CBs issued before the listing are expected to be released into the market. This amount corresponds to 10% of the total shares.

According to the Financial Supervisory Service's electronic disclosure on the 3rd, KNS announced that 416,221 shares of the 1st tranche CB issued on December 29 last year are scheduled to be listed on the 12th following the exercise of conversion rights. This amount corresponds to 10.71% of the issued shares. The conversion price is 18,740 KRW per share.

KNS issued the 1st tranche CB worth 7.8 billion KRW to ShinYoung HT 4th New Technology Business Investment Association on December 29, 2022. The nominal interest rate and guaranteed yield at maturity are 0% and 5%, respectively. The conversion request period for the 1st tranche CB was from December 29, 2022, to December 27, 2026. The delay in stock conversion was due to a lock-up period. The company explained in the investment prospectus that "a one-month lock-up period is confirmed after listing."

This stock conversion appears to be due to the lock-up period being lifted after KNS's stock price surged following the listing. KNS entered KOSDAQ on December 6 last year. The company's public offering price was 23,000 KRW, but on the first day of listing, it recorded a "ttattabul" (a fourfold increase compared to the public offering price), closing at 69,000 KRW. On the 8th of the same month, the price even rose to 123,700 KRW during trading. The closing price on the previous day was 61,000 KRW, down 1,800 KRW from the previous trading day.

If the 1st tranche CB maintains the current stock price until the listing date, KNS CB investors are expected to gain substantial profits. Calculated at the previous day's closing price, the CB amount of 7.8 billion KRW grows to 25,389,481,000 KRW. The yield reaches 225.51%. This stock conversion is also expected to raise concerns about overhang (potential selling pressure), as more than 10% of the total shares will be released into the market.

KNS is a manufacturer of secondary battery CID (Current Interrupt Device) automation equipment, established in April 2006. In its early days, it engaged in the design and manufacturing of automation equipment such as LCD backlight automation equipment. Starting with secondary batteries for smartphones in 2010, it grew by successfully developing cylindrical battery CID equipment for electric vehicles in 2015. According to consolidated financial statements, the cumulative sales for the first three quarters of last year were 26.46768 billion KRW, with an operating profit of 4.64331 billion KRW.

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