Kwak Dong-shin, chairman of HANMI Semiconductor, has been selling shares of HPSP, a listed company on the Korea Securities Dealers Automated Quotations, day after day. Two years ago, Kwak's stake, which exceeded 10%, has fallen below 1% this month, and he is expected to liquidate all remaining shares soon. Kwak, who achieved close to a 600% revenue with HPSP, is allocating the funds to buy back shares and for future investments.

Kwak Dong-shin, Chairman of HANMI Semiconductor. /Courtesy of HANMI Semiconductor

According to the Korea Exchange on the 20th, Kwak has sold 302,813 shares of HPSP, a semiconductor front-end equipment company, through five transactions (Jan. 2, 3, 6, 15, and 17) this year. HPSP manufactures high-pressure hydrogen annealing (HPA) equipment for the semiconductor industry and supplies it to major semiconductor companies such as Samsung Electronics and SK hynix.

Before HPSP went public in 2021, Kwak secured 10.49% (about 37.5 billion won) of the equity using personal funds. After HPSP went public in July 2022 and the stock price rose, he changed the purpose of holding the shares from 'management participation' to 'simple investment' in March 2023 and has been gradually selling the shares.

With this equity sale, Kwak's stake has decreased from 1.15% at the end of last year to about 0.79% (656,685 shares) in just over two weeks. In 1 year and 10 months, his equity holding has significantly dropped from 10.49% to 0.79%. By calculating the amount of shares sold at the disposal price, Kwak has gained 258 billion won from an investment of 37.5 billion won, realizing a profit of over 220 billion won. If he sells all remaining shares, he will earn an additional 21 billion won based on the closing price on the 17th. As he has not purchased HPSP shares since 2023, it appears he will continue the selling trend. During the same period, HANMI Semiconductor, in which he invested, also saw its equity stake in HPSP decrease from 10.49% to 4.55%, achieving a profit of 119 billion won.

The money Kwak earned from selling HPSP shares has mostly been used to purchase HANMI Semiconductor's own shares. Since July 2023, Kwak has started buying back shares, coinciding with the timing of when he began selling HPSP shares. To support the share price, he has purchased 528,054 shares at a cost of 37.3 billion won. The share price of HANMI Semiconductor surged by 157% from the end of July 2023, when Kwak began purchasing back shares, until the 17th of this month. However, during this period, he gifted 2.3 million shares to his two sons, resulting in a slight decrease in his equity stake from 35.51% to 33.81%.

According to public disclosures, there are no domestically listed companies in which Kwak currently holds more than 5% equity. Instead, in May last year, he invested 31 billion won in a consortium led by Crescendo Equity Partners that is investing 180 billion won in LINE NEXT in Japan. He is reported to have secured 8.5% equity, highly evaluating the growth potential of the non-fungible token (NFT) market.

Kwak also invested in HPSP alongside Crescendo PE. Currently, Crescendo PE is in the process of selling their 39.55% equity stake in HPSP through Presto No. 6 Private Equity Fund. The mandatory holding period ended on the 14th of this month, and UBS is overseeing the sale. Crescendo PE plans to conduct preliminary bidding this month and complete the main bidding within the first half of the year.

Meanwhile, opinions have emerged that HPSP's performance this year may slow compared to last year. Lee Min-hee, a researcher at BNK Investment & Securities, said, 'The revenue for the 4th quarter of last year is expected to reach 60.7 billion won, which would be the highest quarterly total.' However, he noted that 'the foundry investments of Intel and Samsung Electronics, which had been active, are uncertain this year, while TSMC's investments are expected to become active again, so a somewhat cautious approach is needed regarding this year's performance.'