The stock price of Hanon Systems, a global automotive thermal energy management solutions corporation under Hankook & Company, is experiencing a rollercoaster ride on the 14th.
According to the Korean Exchange, as of 1:52 p.m. that day, Hanon Systems was trading at 3,255 won, down 485 won (12.97%) from the previous trading day.
Earlier that day, Hanon Systems had reached as high as 3,990 won during trading. In particular, the stock price peaked around 11:35 a.m. when Hanon Systems announced its earnings.
According to the Financial Supervisory Service's electronic disclosure system, Hanon Systems recorded a consolidated revenue of 28.582 trillion won in the second quarter of this year, an increase of about 11.7% compared to the same period last year. Operating profit decreased by 10.2% to 64.3 billion won. This is interpreted as attracting investors due to earnings that were not worse than market expectations.
However, 23 minutes later, at around 11:58 a.m., the situation changed when Hanon Systems announced a paid-in capital increase. The company noted that it is establishing a capital expansion plan aimed at 'improving financial structure and securing growth resources' and that 'to prevent dilution of shareholder value, the paid-in capital increase will be reviewed as a priority option, focusing on a method of allocating shares to existing shareholders and then a public offering of any unsubscribed shares.' Following this announcement, the stock price began to plummet.
Typically, when listed companies conduct a paid-in capital increase through allocation to existing shareholders, the existing shareholders often have to bear the burden of a falling stock price. This is because the increase in the number of shares issued dilutes the value of the stock.