As the domestic stock market struggles, SNT Energy's stock price has surged, drawing attention to the free capital increase the company decided on last year. SNT Energy is a company that manufactures plant equipment, and its stock price is soaring amid expectations of benefits if oil and liquefied natural gas (LNG) projects increase under President Donald Trump's next term.
On the 6th, SNT Energy's stock was trading in the 23,000 won range. In December of last year, it surpassed 24,000 won to reach an all-time high.
The recent surge in SNT Energy's stock is attributed to the 'Trump effect.' President-elect Donald Trump has mentioned the expansion of fossil fuels, leading to expectations that SNT Energy's sales will increase outside of Saudi Arabia and the United Arab Emirates (UAE). In fact, SNT Energy announced on Dec. 23 that it had signed a large supply contract worth 71.9 billion won with Bechtel Energy.
Gwak Min-jung, a Research Institute at Hyundai Motor Securities, noted, 'With the onset of the Trump 2.0 era, LNG projects that were put on hold are beginning to resume, and the contract SNT Energy recently secured is expected to be one of those projects.'
With the surge in stock prices, attention is also focused on the effects of the free capital increase that the company carried out last year. In late March of last year, SNT Energy announced a surprise free capital increase, issuing two new shares for each existing share. Unlike a paid capital increase that raises new funds, a free capital increase simply moves surplus funds to capital in the financial statements.
Based on solid earnings, SNT Energy has opted to distribute shares for free to existing shareholders, significantly benefiting major shareholders in the process.
Free capital increases are conducted excluding treasury shares held by the company. SNT Energy holds approximately 920,000 treasury shares. As the number of common shares, excluding treasury shares with no voting rights, tripled, the shareholding of major shareholders (largest shareholders and related parties) increased from 59.9% to 65.3% after the free capital increase.
Chairman Choi Pyeong-kyu, who owns 50.8% of SNT Holdings, is the major shareholder of SNT Energy. The shareholding ratio of SNT Holdings rose from 55.55% to 60.49%, and Chairman Choi's personal share increased from 0.39% to 0.42%. Following the free capital increase and the Trump effect, the value of the major shareholder's equity has significantly increased.
Meanwhile, as SNT Energy's stock price surges, the Korea Exchange has designated it as an investment warning stock. As a result, the stock price fell, but on the 6th, it showed an upward trend again. Outlooks for SNT Energy’s stock price are somewhat mixed. While there are expectations for increased sales due to ongoing contract wins, there are analyses stating that one should be cautious of possible adjustments due to the stock's rapid short-term increase.