[Click e Stocks] "Korea & Company, Positive Outlook on Growth Business Entry Through M&A"

[Asia Economy Reporter Song Hwajeong] Hana Financial Investment evaluated Korea & Company positively for its entry into growth businesses through mergers and acquisitions (M&A) on the 1st, maintaining a 'Buy' investment rating and a target price of 21,000 KRW.

Korea & Company announced on the 30th of last month that it would acquire a 36.71% stake in Precise Microtechnology, a Canadian fabless company designing and selling ultra-small precision microelectromechanical systems (MEMS) components, for 122.7 billion KRW to diversify its business. Its subsidiary, Hankook Tire & Technology, also participated in this acquisition, securing a 24.48% stake worth 81.8 billion KRW, resulting in the Korea & Company Group acquiring a total stake of 61.5% for 204.5 billion KRW. Researcher Song Seonjae of Hana Financial Investment explained, "This transaction includes both common and preferred shares, and after restructuring the shareholding between the parties, the preferred shares will be fully settled, finalizing the common shares at 34.28% for Korea & Company and 22.86% for Hankook Tire & Technology, making the group's total stake 57.14%."

Precise Microtechnology is a fabless company that designs and sells ultra-small precision microelectromechanical systems required for optical communication network components. Its main products are used in 5G communication infrastructure, data center networks, automotive LiDAR (Light Detection and Ranging: laser-based driving environment recognition sensors) and laser lighting systems, industrial LiDAR and machine vision systems, augmented reality (AR), virtual reality (VR), and medical imaging equipment. Recently, it has gained attention for developing fixed LiDAR sensor components used in autonomous vehicles based on its core optical MEMS technology.

Researcher Song said, "This acquisition is positively evaluated because it allows entry into the high-growth MEMS business, reduces dependence on the tire industry, and can improve return on equity (ROE) by utilizing cash holdings as investment resources."