Sensorview, a supplier to U.S. SpaceX, Qualcomm, and Broadcom, announced on the 17th that it will supply products to Nvidia. Following this news, share prices rose to the price limit.
Though it claims to serve global big tech clients, the company is in a position where it has not escaped perennial losses and must worry about capital impairment. The industry anticipates that to avoid delisting due to capital impairment, the company may once again seek a rights offering this year.
As of the morning of the 18th, Sensorview is down about 5%. It appears to be giving back some of the gains from the previous day when its stock price rose to the limit. The reason for the rapid increase in Sensorview's stock price the previous day was news that it would supply products to U.S. Nvidia. Sensorview announced that it will supply cable assemblies to Nvidia's research office in Israel.
This news was communicated to the market not through an official announcement but via a press release sent to some media outlets. CEO Kim Byung-nam noted, “This supply marks our position as a supplier to Nvidia, a leader in the global cutting-edge data center market,” adding, “We plan to strengthen Sensorview's competitiveness in the global AI and high-speed data center markets in the future.”
The companies that Sensorview has claimed to supply products to are all well-known global corporations. Mentioned are SpaceX, the space development company led by Elon Musk, Qualcomm, semiconductor companies like Broadcom, and domestic conglomerates. Although contracts with these corporations cannot be confirmed in the company's business reports or announcements, the company continuously informs investors about supply news to global corporations through unofficial channels.
However, despite the company's claims of being a supplier to global IT giants, Sensorview is a limited company that must urgently procure funds from outside to maintain its listing. The company has never recorded a profit since its establishment.
Founded by CEO Kim Byung-nam, who came from ACE Technologies, Sensorview produces communication equipment such as cable assemblies and antennas. The company has received investments from Okins Electronics, a semiconductor parts company, and listed on the KOSDAQ market in July 2023 under the special technology provision for materials and components. Sensorview expressed confidence that it would establish a full-scale mass production system with funds secured through its initial public offering (IPO) to achieve profitability.
However, due to a business structure where the cost of goods sold exceeds sales, losses have accumulated. Last year, in an effort to avoid capital impairment, it conducted a rights offering just one year after its listing. The funds raised during the July 2023 public offering amounted to 17.5 billion won, but a decision to conduct a shareholder allocation rights offering within a year brought in 18.5 billion won from external sources.
Thanks to the rights offering, it barely avoided capital impairment, but last year it recorded a net loss exceeding 17.8 billion won again. As the business continues, losses accumulate, and as of the end of last year, total equity (19.2 billion won) fell below capital (20.6 billion won), resulting in partial capital impairment.
While external funds are being secured, CEO Kim Byung-nam's equity is continuously decreasing. The company initially planned to raise 30 billion won through last year's rights offering, but with the largest shareholder, CEO Kim Byung-nam, and Executive Director Kang Kyung-il, who has a special relationship with him, participating in only 20% of the allocated shares, the subscription rate was low, resulting in funds raised being only half of the intended amount.
Sensorview has also raised additional capital by issuing convertible bonds and bonds with warrants, in addition to the rights offering last year. During the rights offering process, CEO Kim sold the allocated warrants to Hanyang Securities, DS Investment & Securities, NH Investment & Securities, Timefolio Asset Management, and Kiwoom Securities, recovering a bit more funds.
The equity rate of CEO Kim, which was 16.0% before the listing, dropped to 13.5% immediately after the public offering and has further decreased to 9.5% after undergoing rights offerings.
The industry views that the company may once again resort to a large-scale rights offering this year. This is because to avoid delisting due to capital impairment, it must increase its capital in a situation where it continues to experience perpetual losses.
Companies listed under the technology special provision are exempt from designation as management issues if they fail to meet performance criteria such as sales for a certain period, but if the capital impairment rate exceeds 50%, even companies listed under the technology special provision are designated as management issues without exception. In order to overcome this situation, ultimately, the only option is to choose a rights offering, according to industry perspectives. In this regard, the company said, “There are no plans for a rights offering this year.”