The KOSDAQ-listed company Innometry noted that the originally over 10 billion won contract size was reduced to 4.2 billion won, less than half of the initial amount, and quietly announced this at the end of the year. This information could have a significant impact on the stock price, but it failed to attract the interest of investors. This is because the announcement was made on Dec. 31, when the stock market was closed.
From Dec. 30, the last trading day of last year, to the following two days, listed companies consecutively issued corrected announcements drastically reducing the amounts of existing contracts. Compared to the previous two trading days, the frequency of announcements increased twofold. There are criticisms that they took advantage of the relatively decreased interest of investors in the year-end stock market to quietly release negative information affecting stock prices.
According to the Korea Exchange on Feb. 2, among the 32 listed companies that corrected contracts through an announcement of 'single sales supply contract establishment' from Dec. 30 to 31, 10 companies (31%) reduced their contract sizes. This is nearly a twofold increase compared to the six listed companies that reduced their contract amounts in the previous two trading days (26-27). The remaining 22 companies slightly increased their contract amounts, mostly due to rising raw material prices leading to increased selling prices or extended contract periods.
The listed company Innometry, specializing in X-ray inspection solutions for secondary batteries, saw the most significant reduction in its contract amount. The contract amount dropped sharply from 10.5 billion won to 4.2 billion won, a 60% decrease. Innometry had agreed to supply X-ray inspection equipment for secondary batteries to Northvolt Ett Expansion, a subsidiary of Sweden's Northvolt, from Dec. 21, 2022, until last year. However, the company was unable to fulfill additional contracts after it declared bankruptcy in October last year.
Innometry stated, "We are currently actively negotiating the collection of remaining claims with the legal manager of the bankrupt client company and the parent company of the bankrupt corporation, as well as the utilization of inventories related to the orders," and added, "We are doing our best to minimize losses."
Bitra Cell, a primary battery corporation projected to record its highest performance ever last year, also halved its contract size. Earlier, Bitra Cell announced it would supply lithium primary batteries for smart meters to the Italian gas and water meter manufacturer Pietro for 16.1 billion won from 2023 until last year; however, the final contract amount following contract termination was only 8.3 billion won.
Bitra Cell indicated that the reduction in the contract amount was due to changes in customer circumstances and instability in raw material supply, but added that it has signed a new supply contract for lithium primary batteries worth 16.7 billion won with the same customer from this year until 2026. However, investors are concerned that the newly disclosed contract size may differ from the initial amount, fearing that order performance could shrink.
The contract size for the KOSDAQ-listed company Genesystem also decreased from 6.1 billion won to 2.6 billion won (-57.8%), while HIZEAERO decreased from 1.9 billion won to 1 billion won (-48.4%). Among the 10 companies, four noted that their contract amounts were reduced by around half. Other companies such as HIZEAERO (-37.5%), Namhae Chemical (-31.4%), and Orbi Tech (-22.6%) also announced reductions in their contract amounts.
Experts advise that with the year-end and holiday break approaching, the practice of issuing negative announcements known as "owl announcements" repeats, necessitating caution from investors.
The exchange considers announcements that come out after the regular trading hours on the last trading day before a break of three days or more, or on the year-end closing day, as owl announcements for investor protection. The exchange re-announces such public disclosures on its website on the first trading day immediately following the break.