Newintech ① Surviving on Shareholder Funds... Raising 13 Billion Won with a 16 Billion Won Market Cap? [Companies at a Crossroads]

Continued Losses After Rights Offering Three Years Ago... 77% Shareholder Losses
Securing Shareholder Confidence Becomes Key Ahead of Large-Scale Capital Increase

KOSDAQ-listed company Newintech is once again seeking to raise capital from its shareholders. Since the rights offering about three years ago, Newintech's stock price has continued to decline due to persistent losses, and the loss ratio for shareholders who participated in that capital increase has reached as high as 77%. Amid these circumstances, there is rising attention as to whether Newintech will be able to attract shareholder participation this time as well.

According to the Financial Supervisory Service's electronic disclosure system on April 23, Newintech decided on March 11 to conduct a rights offering with general public offering of forfeited shares, aiming to raise 12.8 billion won. The number of new shares to be issued is 7.4 million. On the same day, the board of directors also resolved to implement a 5-for-1 reverse stock split. After the reverse stock split, the total number of outstanding shares will decrease to 11.3 million. New shares will account for about 65% of the total shares outstanding post-split.

The funds raised will be allocated as follows: 4 billion won for facility investment, 7 billion won for working capital, and 1.8 billion won for debt repayment. The 1.8 billion won allocated for debt repayment is intended to pay off the remaining balance of the 16th unsecured private convertible bond (CB) issued in May 2024. The facility investment will be used to expand the eco-friendly vehicle capacitor production line, while the working capital will be used to secure raw materials for capacitors.

Newintech's main business is the manufacturing and sales of capacitors and metalized film. The company has expanded its business areas from home appliance parts to eco-friendly automobiles (hybrid, electric, and hydrogen vehicles) and inverters for solar and wind power generation. The company is highly dependent on a single customer, with sales to Hyundai Mobis accounting for 44.55% in 2023, 36.47% in 2024, and 38.49% in 2025 on a consolidated basis.

Previously, in August 2023, Newintech also turned to its shareholders for funding. At that time, the company raised 26.1 billion won through a rights offering. It convinced shareholders to invest by promising to install an automated line at the Gunsan plant to expand production capacity (CAPA) and improve productivity. As a result, 99.75% of shareholders participated in the subscription.

However, the results did not live up to the rosy outlook. Over the most recent three years, Newintech's consolidated revenue was 79 billion won in 2023, 79.5 billion won in 2024, and 82.8 billion won in 2025, showing only slight growth. However, the company continued to post operating losses of 11.1 billion won in 2023, 5.9 billion won in 2024, and 7.2 billion won in 2025.

This ongoing deficit is attributed to the company's weak bargaining power in price negotiations with automakers, which has made it difficult to fully pass on increased costs to selling prices—a structural issue that has become entrenched. As a result of this poor performance, Newintech's capital erosion rate has expanded to 43.48%, and last month the Korea Exchange designated the company as an investment warning stock.

As poor performance persisted, the stock price also declined. During the previous rights offering, shareholders acquired Newintech shares at 1,255 won per share. However, as of April 8, the share price had fallen to 287 won. Shareholders who invested in Newintech have thus experienced a 77% loss.

Meanwhile, inquiries were made to Newintech regarding the reasons for poor performance after the previous capital increase and the company's future business direction, but no response was received.

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