Heungkuk Securities evaluated that Dongwon Industries alleviated concerns about dual listings by deciding to fully integrate its subsidiary Dongwon F&B on the 17th. It maintained an investment opinion of "Buy" and raised the target stock price from the previous 46,000 won to 55,000 won, an increase of 19.6%. The closing price of Dongwon Industries in the previous transaction was 42,200 won.
Park Jong-ryul, a researcher at Heungkuk Securities, said, "Dongwon Industries has resolved the subsidiary dual listing issue by pushing to make its subsidiary Dongwon F&B a 100% subsidiary."
Researcher Park noted, "Korea's holding companies have been excessively undervalued in the stock market due to the issue of subsidiary dual listings," adding that "this decision is the first step towards the advancement of corporate governance." He also mentioned that Dongwon Systems, which has an equity stake exceeding 70% in Dongwon Industries, may also have the potential for subsidiary conversion in the future.
Researcher Park believes that the benefits gained from Dongwon Industries converting Dongwon F&B into a wholly-owned subsidiary are significant. He forecasted, "Not only will it enhance corporate transparency by quelling concerns about dual listings, but the increased number of circulating shares will also activate transactions, which will positively influence attracting investors."
Earlier, Dongwon Industries and Dongwon F&B decided to hold a board meeting on the 14th to finalize a comprehensive stock exchange agreement. Under this agreement, Dongwon Industries will issue new common shares and provide stocks to Dongwon F&B shareholders at a ratio of 1 (Dongwon Industries): 0.9150232 (Dongwon F&B). Once the stock exchange is completed, Dongwon F&B will be incorporated as a 100% subsidiary of Dongwon Industries and delisted.