1. What Happened?
On September 15, 2025, INFAC announced its decision to sell its entire stake in its Chinese subsidiary, SANHE INFAC AUTOMOTIVE COMPONENTS CO., LTD, for KRW 13.7 billion (8.38% of capital). The expected completion date of the sale is October 31, 2025.
2. Why the Divestiture?
Officially, INFAC stated that the reason for the divestiture is to “improve the efficiency of overseas subsidiary management and operations.” However, specific plans for the use of the funds have not yet been disclosed.
3. What’s the Impact on Stock Price?
- Positive Impact: The influx of KRW 13.7 billion could improve INFAC’s financial structure and liquidity. This could lead to a decrease in debt-to-equity ratio and increased capacity for new investments.
- Negative Impact: The connection between SANHE INFAC AUTOMOTIVE COMPONENTS CO., LTD and INFAC’s core business is unclear. If it’s related to core operations, there are concerns that this divestiture could lead to business downsizing.
- Short-term Impact: Depending on market interpretation, stock price volatility could increase.
- Long-term Impact: The stock’s future trajectory will depend on how INFAC utilizes the funds from the sale and its future business strategy.
4. What Should Investors Do?
Currently, a “wait-and-see” approach is recommended. Investors should carefully review future disclosures and IR materials regarding the use of the funds, the importance of SANHE INFAC AUTOMOTIVE COMPONENTS CO., LTD to INFAC’s business, and INFAC’s future business strategy before making any investment decisions.
FAQ
Why is INFAC selling its Chinese subsidiary?
INFAC officially stated the reason as “improving the efficiency of overseas subsidiary management and operations.”
What is the sale amount?
KRW 13.7 billion.
How will this sale affect INFAC’s stock price?
In the short term, volatility might increase depending on market conditions. In the long term, the impact will depend on how INFAC utilizes the funds and its future business strategy.
