(393970) DAEJIN ADVANCED MATERIALS Stock Analysis: Shareholder Divestment Sparks Crisis Concerns

The recent news surrounding DAEJIN ADVANCED MATERIALS stock has sent ripples of concern through the investment community. A significant divestment by a major shareholder, SJ Investment Partners, has cast a spotlight on the company’s precarious financial health and declining performance. For investors, this raises a critical question: is this a temporary storm to weather or a signal of a deeper, more systemic crisis?

This comprehensive DAEJIN ADVANCED MATERIALS analysis will dissect the shareholder sale, evaluate the company’s fundamental weaknesses, explore the potential of its new CNT business, and provide a clear, actionable investment outlook. We will navigate the complexities to help you understand the risks and potential pathways forward.

Understanding the SJ Investment Partners Divestment

On October 24, 2025, SJ Investment Partners, a key institutional shareholder, executed an open-market sale of a substantial block of its shares in DAEJIN ADVANCED MATERIALS Inc. This transaction, conducted across four separate funds, reduced their total stake from 13.60% to 11.82%. This move was formally documented in an Official Disclosure. A shareholder divestment of this magnitude is rarely a trivial event; it often serves as a barometer of institutional confidence and can trigger immediate negative sentiment and selling pressure in the market.

A Company in Crisis: DAEJIN ADVANCED MATERIALS’ Fundamental Status

DAEJIN ADVANCED MATERIALS Inc. specializes in advanced composite materials, primarily for secondary battery processes and automotive components. While the company is pinning its future hopes on the high-growth Carbon Nanotube (CNT business), its current financial reality, as revealed in the H1 2025 results, is deeply troubling. The underlying fundamentals paint a picture of a company facing severe headwinds.

The combination of a sharp revenue decline, a swing to significant losses, and a ballooning debt ratio suggests that the major shareholder’s sale may be a reaction to deteriorating corporate fundamentals.

Key Financial Red Flags

• •Severe Revenue Contraction: H1 2025 revenue plummeted to 32.54 billion KRW, a staggering 63.4% decrease year-over-year. This collapse is linked to the “chasm” phenomenon in the EV and secondary battery markets, where initial growth has stalled before mass adoption, exacerbated by a wider economic slowdown.
• •Profitability Erased: The company swung from profit to a significant operating loss of 3.418 billion KRW. The net loss was even more severe at 10.501 billion KRW, indicating deep-seated issues with cost control and operational efficiency.
• •Deteriorating Financial Health: Total liabilities surged by 27.5% to 103.531 billion KRW. The debt-to-equity ratio climbed to a concerning 135.72%, limiting the company’s ability to raise new capital and fund future growth initiatives. For more on this metric, see this guide on financial ratios.

Stock Price Impact: Short-Term Pain & Long-Term Uncertainty

The impact of the shareholder divestment on DAEJIN ADVANCED MATERIALS stock is likely to be felt across multiple time horizons.

Immediate & Short-Term Outlook

In the short term, increased stock price volatility and significant downward pressure are expected. The sale by a major institution like SJ Investment Partners acts as a strong negative signal, which can erode investor confidence and trigger follow-on selling from retail and other institutional investors. The stock’s existing downward trend since its 2025 KOSDAQ listing is likely to be amplified by this news.

Mid-to-Long-Term Implications

Looking further ahead, the divestment raises questions about the company’s long-term viability and strategy. If the fundamental weaknesses persist, the market may re-evaluate the company’s valuation downwards. The success or failure of the high-stakes CNT business will become the single most important catalyst for any potential recovery. Without tangible results from this new venture, regaining investor trust and rebuilding corporate value will be an uphill battle. You can learn more by reading our comprehensive guide to investing in advanced materials.

Investor Action Plan: A ‘Watch’ Stance is Warranted

Given the confluence of negative factors—poor financial performance, high debt, and a significant vote of no-confidence from a major shareholder—a cautious ‘Watch’ position on DAEJIN ADVANCED MATERIALS stock is prudent. The risk of further downside is considerable.

A potential turnaround hinges on several key factors that investors must monitor closely:

• •Market Recovery: A rebound in demand from the secondary battery and electric vehicle industries is essential for top-line growth.
• •CNT Business Commercialization: The company must demonstrate tangible, profitable results from its new growth engine. Press releases are not enough; revenue and profit are required.
• •Financial Discipline: A clear and credible plan to reduce debt and improve profitability is non-negotiable.
• •Transparent Communication: Management must proactively address investor concerns with clear, honest communication about their recovery strategy.

Until these green shoots of recovery are clearly visible, investors should remain on the sidelines, aware that short-term volatility could present even deeper challenges. Prudent investment decisions must be based on verified fundamental improvements, not speculation.