Shares of the automobile precision parts corporation DY recorded an upper limit price on the 23rd during early trading. This is interpreted as interest from buyers following the news that it will acquire a defense parts corporation and enter the defense industry.
As of 9:09 a.m. on the same day, DY shares are trading at 1,946 won, up 29.99% (449 won) from the previous trading day on the KOSDAQ market. The stock went straight to the upper limit price (the highest bound of the daily price limit) right after the market opened.
The investment sentiment is interpreted to have surged on expectations that DYC, which acquired a defense parts corporation, will enter the defense industry. DYC announced that it has acquired the defense parts manufacturing company Shinsegae Precision before the market opened.
The two corporations held a board meeting the previous day and approved contracts for new business and shareholder acquisitions. They also disclosed plans to follow acquisition procedures according to relevant laws and regulations. DYC will acquire 100% of the equity in Shinsegae Precision. The acquisition scale is approximately 13 billion won.
Shinsegae Precision was established in April 2012. It manufactures the fuses for shells such as the 155mm shells used in the K9 self-propelled howitzer, as well as parts for mortars. It also produces components for major domestic defense products, including the mid-range surface-to-air missile system Cheongung II and the portable anti-tank missile Hyunung.