Korea Zinc stocks continue to decline following rights offering plan

Korea Zinc Inc. experienced a sharp decline in Thursday’s morning trading session, extending the downward trend from the previous day.

Korea Zinc shares were trading at 908,000 won ($659) per share as of 9:16 a.m. on Thursday, down 16.13 percent from the previous day after briefly recovering from a 23.22 percent drop to 830,000 won.

The stock had risen for five consecutive days, hitting a record high of 1,543,000 won on Tuesday. However, the stock hit the day’s intraday low after the company‘s announcement of a large rights offering on Wednesday and continued its downward trend on Thursday, erasing the recent gains.

Korea Zinc’s board of directors decided to issue 3,732,650 new shares through a public offering at 670,000 won per share on Wednesday. The planned issuance represents nearly 20 percent of the company’s outstanding shares.

Reports indicate that the MBK Partners-Young Poong Corp. alliance, which is currently in dispute with Korea Zinc over management control of the company, could file an injunction to halt the issuance of new shares. The Financial Supervisory Service (FSS) is also reportedly considering a request to revise filings to prevent the rights issue.

Meanwhile, shares of Taeyoung Engineering & Construction (Taeyoung E&C) surged on Thursday morning, the first day they resumed trading in over seven months.

Taeyoung E&C shares were trading at 5,370 won as of 9:28 a.m., up 14.26 percent from the previous session.

The exchange announced Wednesday that Taeyoung E&C would remain listed after a review, lifting the trading suspension from that day. The stock had been suspended from trading since mid-March due to capital impairment during the company’s workout process. The company has since continued its efforts to normalize the business, including a capital increase in June 2024.

The resumption of trading is seen by financial insiders as a signal that the company‘s financial restructuring is complete, fueling strong buying interest amid optimism for the company’s recovery. Taeyoung E&C released a statement after announcing the resumption of trading where it pledged to restore investor and market confidence while accelerating operational normalization by securing stable public project contracts to drive growth alongside financial restructuring efforts.

On the same day, secondary battery component manufacturer Sungwoo Co. saw its stock price drop more than 10 percent on its first day of trading on the Kosdaq market.

Sungwoo shares were trading at 28,700 won as of 9:48 a.m., down 10.31 percent from its initial public offering (IPO) price of 32,000 won.

Sungwoo manufactures components for cylindrical secondary batteries, energy storage systems (ESS) and vehicle electrical systems, with LG Energy Solution Ltd. as one of its major customers. The IPO had attracted strong demand from institutional investors with a competition ratio of 516 to 1, and the IPO price was set at 32,000 won, exceeding the expected range of 25,000 to 29,000 won.

In the general subscription stage, the IPO recorded an oversubscription ratio of 816.63 to 1 and attracted deposits totaling 9.8 trillion won.