Deutsche Motors "Dividends and Treasury Stock Buybacks Until Achieving PBR of 1"

by Ryu Hyunseok

Published 14 Mar.2024 10:38(KST)

Deutsche Motors, a comprehensive automotive platform company, announced on the 14th through a fair disclosure the 'Three-Year Shareholder Return Policy Plan to Enhance Corporate Value.' This reflects their intention to quickly respond to the government’s actively promoted corporate value-up program policy.

Deutsche Motors first promised a shareholder return policy through stable dividends. Amid diversification of premium imported car sales brands and stabilization of the online and offline used car platform business, the company has increased dividends per share by 350 KRW, 360 KRW, and 370 KRW over the past three years since 2021. Going forward, even if the net profit scale decreases compared to the previous year, the company plans to maintain the dividend per share at least at the previous year’s level annually.

The company also specifically presented its direction regarding the recently spotlighted share repurchase and cancellation. Deutsche Motors plans to continue its share repurchase and cancellation policy until the price-to-book ratio (PBR), a common valuation standard for listed companies, reaches around 1. As of the closing price on the day before the disclosure, Deutsche Motors’ PBR is only about 0.5. Considering the shareholder return rate through dividends and the scale of net income, the company included in its own value-up program a plan to repurchase and cancel up to 50% of shares.

Additionally, the 1 million treasury shares purchased by December last year are scheduled to be canceled within the first half of this year. Previously, Deutsche Motors completed the cancellation of 1 million treasury shares held at the time and convertible bonds (CB) worth 11.8 billion KRW by acquiring them before maturity in two rounds in November last year and February this year. CEO Kwon Hyuk-min also demonstrated his commitment to responsible management by additionally securing company shares through multiple on-market purchases last year.

Furthermore, Deutsche Motors plans to strengthen information provision activities through active disclosures and investor relations (IR), sharing detailed company status and future business plans with shareholders and domestic and international investors.

A Deutsche Motors official stated, “In line with the government’s accelerated value-up program to overcome the Korea discount, our company plans to implement various policies to raise the undervalued corporate value. We will continue to promote corporate value growth by sharing the fruits of growth with many shareholders and introduce policies to strengthen responsible management as a listed company.”