What Happened to Daedong Electronics?

Daedong Electronics received a delisting decision from the Korea Exchange on July 31, 2025, and filed an injunction to suspend the decision. The main issues are the suspension of the delisting decision, the suspension of the liquidation process, and the resumption of stock trading.

Deteriorating Fundamentals: Why Did This Happen?

Despite increased sales, Daedong Electronics is facing serious problems such as deteriorating profitability, potential impairment of affiliates, and qualified audit opinions. Main factors include sluggish main business, rising raw material prices, poor management of affiliates, and lack of accounting transparency. While there are positive aspects such as the growth of the Thai subsidiary and attempts to enter new businesses, they seem insufficient to offset the negative factors.

Injunction Results: What Will Happen Next?

Short-term Impact

  • Increased Stock Volatility: Stock volatility is expected to increase depending on the injunction results.
  • Weakened Investor Sentiment: The possibility of delisting can negatively impact investor sentiment.
  • Exacerbated Liquidity Issues: If delisting is confirmed, fundraising could become difficult.

Long-term Impact

  • Delisting Decision: The injunction and main lawsuit results will determine whether the company will be delisted.
  • Fundamental Improvement: Whether or not fundamentals improve will determine long-term growth.
  • New Business Success: The success of new businesses is also a crucial variable.

What Should Investors Do?

Investors should continuously monitor the injunction results, fundamental improvement, and the growth potential of new businesses. Particular attention should be paid to resolving affiliate management issues and ensuring accounting transparency. Hasty investment decisions should be avoided, and a cautious approach is necessary.