[Click eStock] "Kiwoom Securities, Stock Price Expected to Remain Flat Amid Decline in Trading Volume"

[Asia Economy Reporter Song Hwajeong] SK Securities forecasted on the 23rd that Kiwoom Securities’ previously scheduled rights offering confirmation acted as a bottom for the stock price, but due to a decrease in trading volume, the stock price is expected to move sideways. Reflecting the shareholder value dilution factor caused by the rights offering, the target price was lowered from the previous 195,000 KRW to 165,000 KRW. The investment opinion was maintained as 'Buy.'

Kiwoom Securities announced the previously scheduled rights offering, and as the issuance conditions were confirmed not to be unfavorable to existing shareholders, the stock price rose by 7.9% on the 22nd. The newly issued shares are convertible redeemable preferred stocks, with a total amount of 440 billion KRW. Among these, 400 billion KRW (2,659,000 shares) have a conversion price of 150,417 KRW (a 25% premium), and 40 billion KRW (166,000 shares) are issued at 240,667 KRW with a 100% premium. SK Securities analyst Koo Kyunghoe said, "As the stock market adage goes, the confirmation of already known bad news acted as a bottom for the stock price," adding, "Although the target price was lowered reflecting the shareholder value dilution caused by the rights offering, this simply reflects the previously unaccounted rights offering, so there is no need to place much significance on it." Analyst Koo added, "Considering the market’s positive response, an additional rise for about 1 to 2 days is also possible."

However, there is an opinion that the stock price is likely to move sideways due to a decrease in trading volume. Since the second quarter, the average daily stock market trading volume was 29.3 trillion KRW, a 23% decrease compared to 38 trillion KRW in the first quarter. Analyst Koo explained, "Since it is a high-beta stock influenced by the stock market trend, after this rebound phase passes, the stock price is likely to move sideways until the second quarter earnings announcement," adding, "In the long term, the success of the recently launched online asset management business is an important issue for the stock price."