Pine Tech, a display equipment manufacturer, is on the brink of being delisted from the KOSDAQ market. Despite a stock consolidation aimed at stabilizing its share price and enhancing corporate value, its market capitalization has dwindled to 11.2 billion won. A recent contract with Samsung Display worth 19.5 billion won has not alleviated the situation.
According to the Korea Exchange, Pine Tech was designated as a management stock on September 8 due to its market capitalization falling below the required threshold. The exchange had previously warned on August 31 that Pine Tech's market cap had remained below 20 billion won for 25 trading days, leading to the current designation.
The company's stock continues to struggle, closing at 1,291 won, down 10 won (0.77%) from the previous trading day. Its market capitalization stands at 11.214 billion won, significantly below the 20 billion won threshold needed to avoid delisting. Based on its total shares outstanding (8,686,316 shares), the stock price would need to rise approximately 78.3% to reach the delisting escape threshold of about 2,302 won.
Pine Tech, established in 2008 and listed on the KOSDAQ in 2015, produces manufacturing equipment and components for organic light-emitting diodes (OLEDs) and secondary batteries. Despite its market cap dropping to the 10 billion won range, the company has secured a substantial order volume. As of the end of June, its cumulative order total for display and secondary battery manufacturing equipment reached 50.64143 billion won, with an order backlog of 28.37130 billion won, which is 2.5 times its current market cap.
In July, Pine Tech signed a contract with Samsung Display Vietnam for the supply of OLED manufacturing equipment worth 19.5 billion won, exceeding its current market cap by about 8.3 billion won.
However, these secured orders have not yet translated into significant performance improvements. For the first half of the year, Pine Tech reported a consolidated net loss of 3.13404 billion won, widening from a loss of 2.76874 billion won during the same period last year. As of the end of June, the company's capital was 25.52886 billion won, with liabilities of 49.31168 billion won, resulting in a debt ratio of 193.2%. Its retained earnings were recorded at a negative 74.12038 billion won.
To enhance corporate value, Pine Tech implemented a stock consolidation. In March, the company decided to consolidate five shares with a par value of 500 won into one share with a par value of 2,500 won, aiming to stabilize its stock price and improve corporate value. This reduced the number of shares outstanding from 43,431,583 to 8,686,316.
Following the management stock designation, the company released a letter to shareholders outlining its plans for recovering corporate value. Pine Tech stated, "Recent tightening of listing maintenance requirements and capital concentration in the market have prevented the intrinsic value of our technology and business from being adequately reflected in our stock price."
The company pledged to strengthen its core business competitiveness, secure new growth drivers, improve its financial structure, enhance communication with shareholders, and restore market confidence to escape the management stock designation and enhance corporate value. Specifically, it plans to address the reasons for the management stock designation promptly through a task force focused on selling non-operating assets and improving profitability.
CEO Kang Won-il acknowledged the seriousness of the management stock designation but emphasized the company's focus on enhancing corporate value through improved business competitiveness and financial structure. He stated, "We will repay the trust of our shareholders with improved performance and restored shareholder value."
Being designated as a management stock does not automatically lead to delisting. If Pine Tech can recover its market cap within a specified period after the designation, it can exit management stock status. However, failure to meet this requirement could result in delisting.
Market observers believe that Pine Tech's recovery hinges on whether the corporate value enhancement measures announced will lead to actual performance improvements.
* This article has been translated by AI.
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