1. Yulho Decides on the 8th Convertible Bond Exercise

Yulho announced the exercise of the conversion right for the 8th convertible bond. 819,672 shares are scheduled to be listed on September 5th, which corresponds to 1.14% of the market capitalization. The conversion price is KRW 610, lower than the current stock price (KRW 816), raising concerns about the dilution effect.

2. What is the impact of the convertible bond exercise?

The exercise of convertible bonds can cause a dilution effect and potential overhang issues due to the increase in the number of shares. However, at the same time, the effect of debt reduction and improvement of the financial structure can also be expected. Although there is a possibility of increased stock price volatility in the short term, considering Yulho’s growth potential and business diversification efforts, there are also positive aspects from a long-term perspective.

2.1. Short-term Impact: Dilution Effect and Overhang Issue

  • Dilution effect due to conversion price lower than current stock price
  • Overhang concerns due to the possibility of potential selling volume release
  • Possibility of increased short-term stock price volatility

2.2. Long-term Impact: Potential for Financial Structure Improvement

  • Expectation of improved financial soundness through debt reduction and capital increase
  • Possibility of securing funds for new business investment

3. Yulho’s Fundamentals and Future?

Yulho continues its sales growth trend with strong sales of computer peripherals, and is actively securing future growth engines such as secondary batteries and mineral resources. However, improving profitability and securing financial soundness are still important tasks.

4. Action Plan for Investors

In the short term, investors should be aware of increased stock price volatility, and in the medium to long term, they should closely monitor Yulho’s new business performance and financial structure improvement. In particular, it is important to pay attention to stock price trends and trading volume changes after the convertible bond exercise, market response to new businesses, and changes in financial soundness indicators.