KOSDAQ-listed Kwang Jin Industry(026910) said on the 21st that the change of the largest shareholder has entered the final stage. The company expects that, along with this change of the largest shareholder, the value of previously undervalued asset and new businesses will be reassessed.
Heo Jeong-do, the incumbent largest shareholder and CEO of Kwang Jin Industry, previously signed a contract on the 2nd to sell his entire 28.8% equity stake to CC Holdings and Dain Investment Association. The transaction is structured to pay about 50% of the existing-share sale price as a deposit and interim payment, and the deal is being evaluated as highly likely to be completed as planned.
Kwang Jin Industry is signaling expectations that its corporate value will be fully reassessed after the change of the largest shareholder.
In particular, the most notable part is the potential value of the factory site in Sinpyeong-dong, Busan. Kwang Jin Industry's Sinpyeong-dong factory site is currently reflected on the books at about 18.6 billion won, its acquisition cost.
However, the site is where the factory was relocated at the policy request of the Busan Metropolitan Government, and it is assessed to have a high likelihood of changes in development conditions and rezoning going forward. In fact, there is a record of a sale contract worth about 91 billion won in 2021. It is being evaluated as an asset whose high value has already been recognized by the market. If development conditions materialize and the asset is revalued, the difference between the current book value and market value could be reflected in the financial statements, resulting in a large valuation gain.
Kwang Jin Industry also announced a push into the bio business, led by cell culture medium, as a new growth engine. The Ministry of Health and Welfare recently adjusted the risk level of advanced regenerative medicine using autologous immune cells to low risk, greatly improving the commercialization environment for the related industry.
Based on this technology, Kwang Jin Industry plans to foster an NK cell culture platform and culture kit business as a new growth axis. It is expected to build a new growth base that spans the bio field beyond its existing steel-centered business structure.
In the market, there is also analysis that if the three pillars—stable core business, undervalued real estate asset, and new bio business—interlock, Kwang Jin Industry's corporate value could enter a new phase.
A Kwang Jin Industry official said, "We are pursuing various measures to enhance corporate value and secure future growth engines after the change of the largest shareholder," and added, "We will strengthen the company's mid- to long-term competitiveness with shareholder value enhancement as the top priority."