Namyang Dairy stock soars amid improved shareholder value

[Photo by Han Joo-hyung]

Shares of Namyang Dairy Products Co. soared on early Tuesday over expectations that the South Korean food and dairy company will increase shareholder value via share buybacks and cancellation.

Namyang Dairy shares traded at 525,000 won ($390.47) as of 9:14 a.m. on Tuesday, up 10.64 percent from the previous session. The company’s preferred shares were also trading 24.41 percent higher at 369,500 won.

Namyang Dairy announced after a board meeting on Monday that it plans to cancel its treasury shares and implement a stock split to enhance shareholder value.

The company plans to cancel 40,269 treasury shares, valued at 23.1 billion won, with the cancellation date set for September 19th, 2024. It will also split the par value of each share from 5,000 won to 500 won to expand the number of shares in circulation and if the stock split proposal passes at the shareholders‘ meeting scheduled for October 25th, the newly issued shares will be listed on November 20th.

“With management normalization becoming visible following the change in management earlier this year, we decided to cancel treasury shares and implement a stock split as part of our commitment to responsible management and shareholder value enhancement,” a Namyang Dairy official said. “We will continue to explore various ways to further increase shareholder value.”

Meanwhile, shares of Apple Inc.-related stocks lost ground on early Tuesday despite the U.S. tech giant’s unveiling of its new iPhone 16.

LG Innotek Co. shares were trading 5.68 percent lower as of 9:36 a.m. at 224,000 won, even falling by 6.11 percent to 223,000 won at one point during the session.

Other stocks, such as BH Co. (-7.23 percent), ITM Semiconductor Co (-2.94 percent), Jahwa Electronics. Co. (-2.39 percent), and LG Display Co. (-2.05 percent), also lost ground.

Apple unveiled its latest iPhone 16 series with artificial intelligence (AI) features on Monday, local time, but its stock price rose by a mere 0.04 percent. The market‘s disappointment was likely attributable to the new AI feature, Apple Intelligence, will only be available in a trial version from October 2024 onwards.

For Korean suppliers, the iPhone’s cost freeze and stagnant demand outlook are expected to create pressure.