KOSPI-listed Dongyang Express Corp.'s No. 2 shareholder, Korea Wide Dongdaegu Cargo Co. (hereafter Dongdaegu Cargo), recently disposed of its entire equity stake. With this sale, Dongdaegu Cargo recorded a loss of more than 2 billion won. The company sold Dongyang Express shares in the early stage of the share-price rise driven by the Seoul Express Bus Terminal redevelopment issue; had it held on, it could have generated more than 300 million won in additional revenue.
Dongdaegu Cargo held 7.85% (227,181 shares) of Dongyang Express equity from Oct. 2020. The average price was 26,428 won per share, totaling about 6 billion won. With no change in equity afterward, it sold in the market over three days on the 26th to 28th of last month at an average 17,268 won per share, recovering about 3.9 billion won. As a result, it suffered a loss of about 2.08 billion won.
This equity was the volume that Vice Chairman Noh Heon-young of Gyeongbuk Express and affiliates reorganized in 2020 as a disclosed transfer by changing the equity holder to Dongdaegu Cargo. Vice Chairman Noh first appeared as the No. 5 shareholder in 2012 by purchasing 5.81% of Dongyang Express equity with affiliates including Korea Wide Dae Hwa Transportation and Korea Wide Jin An Express. It was for simple investment, and the equity increased through stock dividends and bonus issues afterward.
Dongdaegu Cargo's current largest shareholder is Korea Wide Co., with 73.39% equity. Dongyang Express' share price fell steadily from the 26,000-won range in 2020 to 6,560 won in Apr. this year. It posted losses for five straight years from 2020 through last year. Because of this, Dongdaegu Cargo had been stuck in Dongyang Express for more than five years.
However, on the 26th of last month, when the Seoul Metropolitan Government said it would begin preliminary talks on a mixed-use development of the Seoul Express Bus Terminal site in Seocho District, Dongyang Express, which holds 0.17% equity in Seoul Express Bus Terminal, drew attention as a beneficiary stock. The share price surged past 17,000 won at once, and Dongdaegu Cargo appears to have moved quickly to dispose of the equity.
But excluding the four days from the 2nd to the 5th of this month when trading was suspended, Dongyang Express' share price hit the daily upper limit for three consecutive trading days, soaring to 27,750 won. Although it was designated an investment-risk issue and trading was halted for one day, after trading resumed on the 9th it climbed to 36,050 won and hit the upper limit again.
Even if Dongdaegu Cargo had sold at the previous trading day's closing price, it could have made a profit of more than 300 million won. However, because it rushed to unwind equity in the early stage of the rally, the assessment is that it ultimately failed to realize revenue.