[After CB Issuance] Thanks to Subsidiary... YesTy CB Conversion Resumes

[Asia Economy Reporter Yoo Hyun-seok] The stock conversion of YesT's convertible bonds (CB), which had been dormant for a while, is resuming after four months. As the stock price surged due to growth expectations for its subsidiary YesPowerTechnics, investors are reportedly exercising their conversion rights. It is expected that investors will gain substantial profits from this stock conversion.

According to the Financial Supervisory Service on the 27th, YesT announced the exercise of conversion rights on the 8th and 25th of this month. This marks the resumption of conversion requests after about four months since September 16 last year. The requested amounts were 1.2 billion KRW and 2.4 billion KRW respectively, corresponding to 154,956 shares and 309,916 shares. The scheduled listing date is the 20th of next month.

The CB being converted this time is the 3rd series. It is an anonymous, interest-bearing, unsecured private placement CB worth 20 billion KRW issued in March 2019. Both the nominal interest rate and maturity interest rate are 0%. It is understood that the intention was to convert to common stock when the stock price rises to gain capital gains. The conversion period is from March 7 last year to February 7, 2024. The initial conversion price was 10,087 KRW, representing 15.18% of the total shares.

The conversion price has been adjusted twice. The 2019 performance turned to a deficit and sales were halved, negatively impacting the stock price. As a result, the conversion price was lowered, and the number of convertible shares increased from 1,982,750 to 2,582,644 shares.

Investors converting to stock this time are expected to gain substantial profits. As of the previous day, the stock price was 15,400 KRW. This is over a 72% increase compared to the end of last year, nearly double the conversion price of 7,744 KRW. If the stock price is maintained until the listing date, it would represent an approximate 99% return.

The rise in YesT’s stock price is interpreted as reflecting expectations for the 'SiC (Silicon Carbide)' power semiconductors being developed by its subsidiary YesPowerTechnics (with a 29% stake). Power semiconductors control electricity to extend battery usage time. They are used in electric vehicles, solar power, Internet of Things, artificial intelligence, and mobile devices. SiC power semiconductors are known to have lower energy loss and higher energy efficiency compared to conventional power semiconductors.

Although investors converting this time have increased chances of profit, those who converted earlier are believed not to have gained significant benefits. Last September, 900 million KRW worth of the 3rd series CB was converted into stock. The stock listing date was October 13 last year, and the closing price that day was 9,330 KRW. If the stocks had been sold on the listing day, an estimated profit of about 20% would have been realized.

YesT is a specialized company in semiconductor and display thermal control equipment and was listed on the KOSDAQ market in 2015. It produces various equipment such as furnaces (devices for heating or melting materials), EDS chillers, pressurized cure units, and chambers.