Why Did KB Asset Management Reduce Its Stake?
While initially investing in Sekyung Hi-Tech for ‘simple investment’ purposes, KB Asset Management recently decreased its holdings by more than 1%. This continues a trend of net selling observed since the end of July and is likely a reflection of concerns regarding the company’s weak Q1 performance and the slowdown in the mobile market. It’s also possible that this move is part of a broader portfolio adjustment.
Sekyung Hi-Tech’s Current Situation
Sekyung Hi-Tech faced challenges in Q1 2025, with declining sales and an operating loss. Key factors contributing to this include slowing demand in the mobile film market, customer inventory adjustments, and increased R&D investment in new businesses. However, net income turned positive due to gains from derivative financial instruments, highlighting the volatility of the company’s financial performance. The company’s current reliance on the mobile market makes it vulnerable to market fluctuations, emphasizing the urgent need for growth in new business areas.
What Should Investors Do?
KB Asset Management’s divestment could put downward pressure on Sekyung Hi-Tech’s stock price in the short term. However, from a long-term investment perspective, changes in the company’s fundamentals and the performance of its new businesses will ultimately determine the stock’s direction. For now, it’s advisable to adopt a ‘wait-and-see’ approach, closely monitoring announcements regarding new business performance, signs of recovery in the mobile market, and any further changes in KB Asset Management’s stake. While keeping an eye on the growth potential of the secondary battery and small- and medium-sized IT components businesses, risk management should be a priority.