1. What Happened? BH Announces KRW 27 Billion Treasury Stock Disposal
On September 15, 2025, BH announced its decision to dispose of 1,250,000 treasury shares, equivalent to approximately KRW 27 billion. The purpose is to issue exchangeable bonds with the treasury stock as the underlying asset, a strategy for capital procurement.
2. Why? The Need for Funding Amidst Underperformance
BH’s performance in the first half of 2025 was disappointing. Operating profit turned negative due to declining sales in the FPCB division, rising raw material prices, and increased manufacturing costs. High debt ratios and increasing inventory levels are also a burden. This treasury stock disposal is likely a strategic move to improve the company’s financial structure and secure funds for future investments.
3. What’s Next? Analyzing the Potential Impact
- Positive Aspects: Alleviation of short-term financial burden, potential for securing future growth drivers.
- Negative Aspects: Possibility of shareholder value dilution, increased market uncertainty, uncertain performance improvement.
The extent of share dilution will depend on the conversion terms and timing of the exchangeable bonds. The effectiveness of the capital raised in improving performance will be crucial.
4. What Should Investors Do? Action Plan
- Focus on Performance Improvement: Monitor the recovery of demand in the FPCB division and growth in the automotive electronics division.
- Check Exchangeable Bond Terms: Understand the conversion terms and the potential risk of share dilution.
- Monitor the Macroeconomic Environment: Keep an eye on changes in interest rates, exchange rates, and market conditions.
- Re-evaluate Company Value: Reassess BH’s value considering its underperformance and the treasury stock disposal.