[Featured Stock] SM Hits 52-Week High Amid Shareholders' Meeting Impact

[Asia Economy Reporter Minji Lee] SM has been maintaining an upward trend for four consecutive trading days, reaching a 52-week high.

At 10:07 AM on the 1st, SM was traded at 86,900 KRW, up 6.5% from the previous trading day. This surpassed the previous high of 85,600 KRW. It is analyzed that the stock price reacted after activist private equity firm Align Partners Asset Management won the proxy battle against SM at the shareholders' meeting held the day before.

At the shareholders' meeting the day before, SM appointed Junho Kwak, former Chief Financial Officer (CFO) of SK Nexilis, as auditor. Former CFO Kwak was a shareholder proposal from Align. Among approximately 8.03 million shares of attending shareholders, about 6.53 million shares supported the appointment of Kwak as auditor. Regarding the appointment of the auditor, Im Gi-young, a non-executive advisor of the Hanla Group recommended by SM, voluntarily resigned.

Align believes that the governance issue is suppressing the stock price because Lee Soo-man, the general producer, has a producing contract with SM as an individual business operator under the name Like Planning and receives a certain amount of sales as royalties. SM pays up to 6% of its sales to Like Planning. In fact, after listing, 142.7 billion KRW flowed to Like Planning until the third quarter of 2021, and 18.1 billion KRW flowed until the third quarter of 2021.