[Special Stock] DB HiTek Shows Early Strength Following Gangseongbu Fund Shareholder Letter

DB HiTek's stock price showed strength early in trading on the 2nd. This is interpreted as a result of the private equity fund KCGI, led by CEO Kang Sung-bu, taking concrete actions to exercise shareholder rights against DB HiTek.

As of 9:16 a.m. on the same day, DB HiTek was trading at 63,100 KRW, up 3.95% compared to the previous trading day on the Korea Exchange.

In March, KCGI acquired a 7.05% stake in DB HiTek (3,128,300 common shares) through its special purpose company (SPC), Caropy Holdings, and demanded share buybacks and the formation of an independent board of directors.

On the previous day, KCGI publicly released a shareholder letter, stating that DB HiTek had refused face-to-face discussions for governance improvements, marking the start of active shareholder activism.

The shareholder letter included KCGI’s vision of good governance, DB HiTek’s undervalued corporate value, reasons for the undervaluation, and proposals to resolve the undervaluation.