On the 21st, SK Securities analyzed that the shareholder-friendly policies of DI Dongil will resolve the issue of stock price discounting, which has been undervalued relative to its assets.
DI Dongil, established in 1955 as Dongil Textile and listed on the KOSPI market in 1964, is a textile and spinning company that recorded sales of 913.7 billion KRW and an operating profit of 44.8 billion KRW (OPM 5%) last year. Since its establishment, through steady business diversification and structural improvements, it has now emerged as the leading domestic manufacturer of aluminum foil for secondary batteries.
Heo Seon-jae, a researcher at SK Securities, stated in a report on the same day, “The reason to pay attention to DI Dongil now is that, following the recent expansion of the company's shareholder-friendly policies, the issue of excessive stock price discounting compared to peers in the same industry, which was a major problem, is expected to be resolved.”
Currently, Dongil Aluminum, the main subsidiary of DI Dongil (with a 90% stake) accounting for more than 60% of the company's operating profit, is the number one domestic manufacturer of cathode foil for secondary batteries, holding advantages over major competitors in terms of production capacity, sales scale, and profitability.
Researcher Heo analyzed, “Notably, the total market capitalization of DI Dongil, including Dongil Aluminum, is about 830 billion KRW (approximately 600 billion KRW after deducting 25% treasury stock), which is significantly undervalued compared to the market capitalization of its major competitor, Sama Aluminum, at 1.7 trillion KRW.”
He added, “Furthermore, DI Dongil owns multiple land properties including its headquarters building in Samseong-dong, Gangnam-gu, and idle land near Incheon/Guro Digital Complex Station, with the estimated current value of the land holdings alone exceeding 1 trillion KRW, which we judge provides a sufficient margin of safety.”
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