HLB Biostep Announces ₩1.9 Billion Convertible Bond Issuance
HLB Biostep announced on September 23, 2025, its decision to issue ₩1.9 billion worth of convertible bonds. Investors including SK Securities and JJ Asset are participating, with payment due on October 1st. The conversion period is from November 1, 2025, to September 1, 2028. The conversion price is set at ₩1,493, higher than the current stock price of ₩1,342.
Why the Bond Issuance?
HLB Biostep is currently experiencing operating losses. This bond issuance is likely intended to secure operating funds and fuel growth initiatives. Faced with challenges like declining capacity utilization in its CRO business, the influx of capital is expected to bolster new ventures such as animal testing facility construction, pet medical business development, and the establishment of an AI drug discovery platform, while also supporting a turnaround in the CRO segment.
Impact on Stock Price?
In the short term, the anticipation of increased funding may positively influence the stock price, but the higher conversion price raises concerns about potential dilution. The long-term impact hinges on whether the funds translate into improved business performance. Tangible results could create upward momentum, while failure to improve profitability may put pressure on the stock due to increased share count and EPS dilution.
Investor Action Plan
- Short-term investors: Be mindful of increased short-term volatility and closely monitor market conditions and company announcements.
- Long-term investors: Focus on whether this funding leads to tangible improvements in business performance. Track key metrics such as CRO capacity utilization rates and the success of new ventures. Also, pay close attention to macroeconomic factors like interest rate and exchange rate fluctuations.