[Stock in Focus] Sajo Industries Rises Over 5% on Hopes for Commercial Act Amendment Benefits

Sajo Industries showed strong performance in early trading on June 5. This appears to reflect expectations that the company's stock price will rise if the Commercial Act amendment, which President Lee Jaemyung has promoted as a key campaign pledge, is passed.

As of 9:48 a.m. on this day, Sajo Industries was trading at 57,600 won, up 3,000 won (5.49%) from the previous trading day. The stock also rose 9.97% the previous day, continuing its steady upward trend since the presidential election season began.

The recent surge in the stock price is interpreted as being driven by expectations for the 'Commercial Act amendment.' President Lee has strongly expressed his intention to amend the Commercial Act to expand the fiduciary duty of directors from the company to shareholders. The core of the amendment is to broaden the target of the board's fiduciary duty to include not only the company but also shareholders. This is seen as a solution to the perception that, until now, the board has mainly reflected the interests of major shareholders when conducting 'split listings' or determining 'merger ratios between companies,' resulting in significant losses for minority shareholders.

Previously, Um Sujin, a researcher at Hanwha Investment & Securities, pointed out, "Sajo Industries' PBR is extremely undervalued at 0.35," and explained, "The main reasons for this undervaluation are the fact that Sajo Industries and its affiliates have not revalued their assets since acquisition, as well as various controversies related to governance structure, including suspicions of expanding control and illicit succession through internal transactions, and the circular shareholding structure involving Sajo Industries, Sajo Daerim, and Sajo Ohyang." She further analyzed, "If the Commercial Act is amended, there is a possibility of asset revaluation and increased dividends to support the stock price."

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