The share price of WONIK IPS Co., a semiconductor equipment maker, has more than doubled in the past three months, heightening expectations for the WONIK group as a whole. However, WONIK PNE, which is in charge of the group's secondary battery business, is struggling with a loss-making subsidiary.
WONIK PNE returned to the black in the first half of this year, but as its electric-vehicle charger manufacturing subsidiary PNE Systems fell into capital impairment, it began overhauling its structure. The WONIK group is seeking a new leap forward by streamlining through a merger of subsidiaries and expanding into new businesses.
According to the Korea Exchange (KRX) on the 31st, the share price of Wonik IPS, which was 27,300 won on July 25, surged 138% to 65,000 won at the previous day's close. During intraday trading it spiked to 68,800 won, marking a 1-year high.
The WONIK group's secondary battery business also showed signs of a rebound this year. WONIK PNE, which makes secondary battery manufacturing equipment, posted first-half revenue of 221.5 billion won, up 130% from the same period a year earlier (96.5 billion won). Operating results also swung from a 41.2 billion won loss to a 7.2 billion won profit. It is the first earnings recovery in three years.
But the fallout from the price offensive by low-cost Chinese products is significant. PNE Systems booked losses for two straight years and fell into capital impairment. After posting 13.2 billion won in revenue and a 3.6 billion won operating loss in 2023, it recorded 18.1 billion won in revenue and a 4.7 billion won operating loss last year. As of last year, liabilities stood at 20.5 billion won and capital was minus (-) 1.5 billion won, with financial soundness deteriorating rapidly.
In response, WONIK PNE decided to merge and absorb its 100% subsidiary PNE Systems. The merger plan passed at a shareholders meeting in September, and the procedure is scheduled to be completed on Dec. 5. After the merger, PNE Systems will be dissolved, and WONIK PNE will remain as the surviving entity.
After the merger, WONIK PNE plans to push for greater efficiency in the EV charger business while expanding into new businesses such as "battery testing services."
Currently producing the secondary battery inspection equipment "Cycler," WONIK PNE plans to leverage it to expand into a services model that directly tests client batteries. To that end, it recently raised 10 billion won in facility funds from financial institutions.
A WONIK group official said, "Through the merger, we will efficiently integrate human and physical resources, and strengthen both sales efficiency and competitiveness," adding, "Through maximizing synergy, we expect improvements in the financial structure and an earnings recovery."