Once called the KOSPI secondary battery bellwether and nearing a market capitalization of 1 trillion won, Kumyang now faces the final hurdle in its delisting process. The Korea Exchange (KRX) plans to convene a listing disclosure committee by May 26 to make a final decision.
This review will combine and assess the reasons for the disclaimers of opinion for the 2024 and 2025 fiscal years. Shinhan Accounting Corporation recently cited going-concern uncertainty, limitations on audit procedures, and a scope limitation on the prior year's financial statements as grounds for a disclaimer.
A disclaimer of opinion means the auditor cannot verify the accuracy of the financial statements. If it occurs for two consecutive years, it becomes difficult to trust even historical figures, undermining confidence in the overall financial information.
Founded in 1978, Kumyang grew on the back of its blowing agent and precision chemicals businesses and expanded into secondary batteries in the 2020s. However, funding setbacks increased its financial burden.
The company pursued a 450 billion won rights offering in 2024, but after financial authorities demanded corrections and the stock fell, it was withdrawn in early 2025. During the process, the company was designated an unfaithful disclosure entity due to reversals of disclosures, and as cumulative penalty points exceeded 15, it was placed on a watch list. Trading has since been halted.
◇ Liquidity crisis spills into asset auctions and seizures…fundraising disrupted
The most immediate issue in Kumyang's financial structure is a liquidity crunch. Simply put, near-term liabilities far exceed cash that can be realized quickly. As of the end of 2025, current assets were 77.9 billion won and current liabilities were 649.1 billion won.
Cash and cash equivalents were 6.3 billion won, down sharply from 20 billion won the previous year. Of that, 6.2 billion won is restricted due to debt-related seizures, leaving virtually no available cash. Meanwhile, interest-bearing borrowings due within one year total 228.8 billion won. Operating cash flow deteriorated from 14.9 billion won in 2023 to -20.3 billion won in 2024 and -43.2 billion won in 2025.
Capacity for additional funding is also limited. Property, plant, and equipment are pledged as multiple collateral to Busan Bank, Korea Development Bank (KDB), Agricultural and Commercial Bank, China Construction Bank, and Bank of China. The remaining committed amount is 457.4 billion won.
This liquidity pressure is leading to actual asset execution and receivables collection. On Apr. 17, the Busan District Court Dongbu Branch decided to commence auction proceedings for a site in Jangan-eup, Gijang-gun, Busan, owned by Kumyang. The site is for a secondary battery plant, and the application was filed by the contractor due to unpaid construction costs.
Financial institutions are also tightening their response. Busan Bank applied for seizure and collection orders on claims totaling about 137.9 billion won, and the court granted the request. As a result, disposition of those claims is effectively restricted.
External fundraising is also delayed. The company is pursuing a 405 billion won rights offering, but the payment date has been postponed multiple times. Under the latest corrected disclosure, the payment date is June 30, and the scheduled listing date is July 21.
◇ Plant halt and mine capital erosion…investment losses pile up
In the core secondary battery business, revenue was 300 million won and operating loss was 45 billion won in 2025. The Busan Dream Factory 1 operated at just 10.7%. Construction of the large-scale Gijang plant, intended for mass production, was halted due to a shortage of construction payments. Construction-in-progress accounted for 719.1 billion won, or 69%, of total property, plant, and equipment.
In 2024, the company signed a battery supply contract with Nanotech Energy in the United States for 2025–2030. The contract totals 460.5 billion won, or 302.9% of 2023 consolidation revenue. However, production is contingent on completion of the Gijang plant, and delivery schedules have been adjusted due to delays in the plant.
The resources development unit recorded a 3.9 billion won loss with no revenue. The Mongolia mine subsidiary is in a state of complete capital erosion, with liabilities exceeding assets. Following a 85.4 billion won impairment loss on mining rights in the prior year, additional amortization continued in the current period.
The core blowing agent business remained profitable in 2025, with operating income of about 5 billion won. However, losses in the secondary battery and resources development units more than offset this.
Total revenue fell from 153.7 billion won in 2024 to 102.8 billion won in 2025. Operating and net losses narrowed to 44.7 billion won and 69 billion won, respectively, from the previous year. Rather than structural improvement, the change largely reflects a base effect from one-off losses in the prior year. A significant portion of the 186.1 billion won net loss in 2024 came from one-off items such as an 85.4 billion won impairment on mining rights and a 46.9 billion won equity-method loss from affiliates.
◇ Liabilities down and capital up…but existing shareholder equity diluted
Interest-bearing borrowings total 314.9 billion won. About 30% of that consists of borrowings from related parties. Long-term borrowings include 57.8 billion won from KJ International, 10.3 billion won from KY Eco, and 4.8 billion won from Chief Executive Ryu Gwang-ji personally, while short-term borrowings also include 15.8 billion won in Ryu's personal name.
KJ International and KY Eco are entities related to the largest shareholder, creating a structure in which the controlling shareholder also serves as a major creditor to the company. In 2024, the company converted about 300 billion won of these related-party borrowings into equity, turning liabilities into capital. In the process, liabilities fell but new shares increased, diluting existing shareholders' equity.
If the listing disclosure committee decides to delist, a seven-trading-day liquidation session typically follows after three trading days' notice. However, if a court injunction is filed, the process can be halted.
Kumyang's minority shareholders are asking for an extension of the trading halt. Kumyang has 235,865 minority shareholders, who hold 72.31% of total equity.
Kumyang declined to answer ChosunBiz's inquiry, saying, "We have nothing more to say at this time."