DGP Convertible Bond Exercise, What Happened?

DGP is planning to issue 1,545,594 shares through the 33rd convertible bond exercise. This represents 5.91% of the market capitalization and is scheduled to be listed on October 20, 2025. Although the current stock price (KRW 1,693) is higher than the conversion price (KRW 1,294), a significant volume could be released into the market depending on future stock price fluctuations.

Investment Opportunity? What are the risk factors?

  • Positive Factors:
    • Entry into promising future industries such as green hydrogen, EV charging, and ESS
    • Expected synergy through securing the largest shareholder position in NGVI
    • Potential benefits from global eco-friendly energy policies
  • Negative Factors:
    • Continued decline in sales and operating losses
    • Deteriorating financial soundness (decrease in capital, increase in debt ratio)
    • Litigation risks and history of inaccurate disclosures
    • Unstable cash flow

How will the convertible bond exercise affect the stock price?

The convertible bond exercise can lead to a stock dilution effect due to the increase in the number of shares. In particular, because the current stock price is higher than the conversion price, the possibility of selling pressure for profit-taking cannot be ruled out. In addition, the deterioration of the macroeconomic environment, such as interest rate hikes and exchange rate fluctuations, can also negatively affect DGP’s stock price.

What should investors do?

  • Short-term investors: Carefully monitor market reactions and stock price trends before and after the listing of converted shares and approach with caution.
  • Long-term investors: Continuously evaluate DGP’s new business performance, resolution of litigation and disclosure risks, and recovery of financial soundness.