What Happened?: Simmtech’s Convertible Bond Exercise Announcement

Simmtech announced on September 15, 2025, the exercise of convertible bonds totaling 388,796 shares (1.19% of market capitalization). The conversion price is 21,194 KRW, and the exercise schedule is spread out from September 24th to 30th.

Why It Matters: Potential Stock Dilution

The current stock price (16,975 KRW) is lower than the conversion price (21,194 KRW), so the possibility of a short-term stock plunge is low. However, if the stock price surpasses the conversion price in the future, a large number of new shares issued can dilute the value of existing shares. This is a risk factor that investors must consider.

Simmtech Fundamental Analysis: The Dilemma of Growth and Profitability

Simmtech maintains the world’s leading market share in the semiconductor PCB market, especially in the GDDR substrate field. However, the shift to a deficit in the first half of 2025 (-10.78 billion KRW) and the high debt ratio (243.51%) raise concerns regarding profitability and financial soundness. Continuous facility investment is a strategic choice to secure future growth engines, but it can act as a factor that increases financial burden in the short term.

Investor Action Plan: Observation and Divided Purchase Strategy

  • Observation or Divided Purchase: Rather than aggressive investment, observing the market or implementing a divided purchase strategy while confirming the trend of fundamental improvement is appropriate.
  • Risk Management: Investors should manage investment risks by considering the potential dilution from the exercise of convertible bonds, as well as macroeconomic variables such as exchange rate and interest rate fluctuations.
  • Focus on Profitability Improvement: Closely examine the possibility of a turnaround through Simmtech’s future earnings announcements.
  • Monitor Financial Soundness: Continuously monitor financial restructuring plans and their implementation to reduce the debt ratio.