What Happened at Daechang Solution?
Daechang Solution announced a 100:500 stock merge on July 30, 2025. Trading will be halted from September 29 to October 20, resuming on October 21.
Why the Stock Merge?
Stock merges aim to boost investor sentiment by artificially inflating stock prices. However, it’s crucial to remember that the company’s actual performance and assets remain unchanged. In Daechang Solution’s case, this can be interpreted as a strategy to address the poor Q1 2025 results (declining sales, operating losses, high debt ratio) and attract investor attention.
So, Should You Invest?
While there’s potential for short-term price gains, sustained growth is unlikely without fundamental improvements. The current high-interest rate environment and sluggish shipbuilding market pose challenges for Daechang Solution. However, R&D investments in future growth drivers like marine solutions, nuclear waste, and hydrogen energy offer a glimmer of hope.
Action Plan for Investors
- Short-term investment: Possible to capitalize on potential short-term price increases, but be aware of high volatility.
- Long-term investment: Carefully observe Q2 and subsequent earnings, the execution of debt reduction plans, and new business performance before making investment decisions.
- Risk management: Limiting investment amounts and diversifying your portfolio are crucial.