[Asia Economy Reporter Jang Hyowon] Gangwon Energy's stock trading will resume starting today (25th). This comes about 2 years and 2 months after the trading suspension in April 2020.
Gangwon Energy announced on the 25th that the resumption of trading and maintenance of listing were confirmed following the review by the Corporate Evaluation Committee (CEC) held at the Korea Exchange the previous day. It was evaluated that management and financial transparency were secured through a complete replacement of the largest shareholders and management centered on Pyeongsan Partners, as well as the disposal of affiliate shareholdings. Regarding the audit opinion, the uncertainty of the company's going concern was resolved by confirming a positive audit opinion in the 2020 and 2021 audit reports and a return to profitability last year.
A company official stated, "We have faithfully implemented the improvement plan for the resumption of trading and have continuously made efforts to strengthen business structure and secure financial soundness," adding, "We will do our best to enhance shareholder value through expanding orders in existing businesses and full-scale development of the secondary battery new business, as well as shareholder-friendly policies along with business performance growth."
Along with the normalization of stock trading, significant performance growth is also expected. Since early this year, orders have been rapidly increasing due to the favorable performance of the existing eco-friendly plant business and the full-scale launch of the secondary battery new business. According to disclosures, as of May, the cumulative order amount secured by Gangwon Energy is approximately 46.3 billion KRW, already surpassing last year's sales.
In particular, from the second half of this year, the recognition of sales from orders secured last year will begin in earnest, leading to noticeable growth not only in scale but also in profitability. Due to the nature of the energy industry, sales are reflected according to the progress rate of supply contracts. Since May last year, Gangwon Energy's order amount has rapidly increased, with last year's order backlog reaching approximately 49.3 billion KRW. Sales from additional orders secured this year are expected to be sequentially reflected, continuing double-digit sales growth compared to last year.
A company representative explained, "The existing eco-friendly energy plant business is steadily increasing orders both domestically and overseas, so achieving double-digit growth this year will be smooth," and added, "The secondary battery new business will also focus all efforts on securing future growth engines by strengthening business cooperation with solid partners in the cathode material sector and expanding additional orders."
Meanwhile, Gangwon Energy's stock trading was suspended after April 3, 2020, due to a "qualified audit opinion" for the 2019 fiscal year caused by the refusal of audit opinion for its affiliate SD System, in which it had a 14.5% equity investment. Gangwon Energy completed the disposal of the troubled affiliate by selling all shares of SD System through a stock transfer agreement in March last year.
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