What Happened?
On September 22, 2025, minority shareholders filed a request with the Seoul Southern District Court for an extraordinary general meeting. The key agenda items are the dismissal and appointment of auditors, suggesting a potential change in management. The company has stated that it will respond in accordance with legal procedures.
Why Did This Happen?
While current market consensus is difficult to ascertain, the company’s poor performance in the first half of 2025 (50% decrease in sales, 70% decrease in operating profit, and net loss) likely contributed to this event. Minority shareholders appear to be holding the management accountable and demanding a management reshuffle.
What are the Potential Impacts?
Short-Term Impacts (1-3 Months)
- Increased Stock Volatility: Investor sentiment could weaken, leading to increased stock price volatility.
- Increased Trading Volume: Information seeking and position adjustments could lead to higher trading volume.
Long-Term Impacts (3+ Months)
- Positive Scenario: Improved management transparency and efficiency.
- Negative Scenario: Continued management uncertainty and disruption to business operations.
What Should Investors Do?
The current investment recommendation is ‘Hold’. Investors should consider the following factors when developing their investment strategy:
- Monitor Key Variables: Court ruling, general meeting outcome, company’s response strategy, and earnings improvement.
- Consider Risk Factors: Prolonged management dispute, increased litigation costs, and potential deterioration of fundamentals.