OLED Business Shows High Growth with Annual Performance Improvement
Stock Price Higher Than CB Conversion Price, Yielding Capital Gains
Investors who invested in PNHTech convertible bonds (CB) are expected to achieve a return of up to 30%. As the stock price rises on expectations that the organic light-emitting diode (OLED) business will continue its high growth, investors are rushing to convert their bonds into shares.
PNHTech announced on the 24th that 224,154 new shares will be newly listed due to the exercise of conversion rights for the first series of anonymous, non-interest-bearing, unsecured private convertible bonds worth 4.2 billion KRW. This is the fourth conversion exercise following those on the 10th, 13th, and 14th of this month.
PNHTech issued CBs worth 20 billion KRW last May. The funds were intended to inject 8 billion KRW for facility investment and 12 billion KRW for operating capital. Samsung Securities and Korea Investment & Securities each invested 5 billion KRW, totaling 10 billion KRW. Additionally, Meritz Alpha View New Technology Finance Association No. 3 and Almus SoBujang Innovation Enterprise Investment Association No. 6 each invested 5 billion KRW, totaling another 10 billion KRW. The first series CB has a 0% coupon rate and maturity interest. It is interpreted as an attempt to gain capital gains by converting to stocks.
The initial conversion price was 25,189 KRW. The conversion price has changed three times: in August last year, and in February and May this year. The conversion price dropped to 17,633 KRW, then rose back to 25,189 KRW, and finally lowered again to 18,714 KRW.
With this stock conversion, CB investors are expected to earn more than 30% profit. The CBs announced on the 10th, 13th, and 14th were listed on the 27th. They amount to 3.15 billion KRW each, totaling 9.45 billion KRW (504,969 shares). The new shares were listed on the 27th, with the closing price at 24,400 KRW. If sold on the same day, a 30.38% return could be expected.
The other CB is similar. The CB converted on the 24th totals 224,154 shares, worth approximately 4.194 billion KRW. The conversion price is 18,714 KRW. It is scheduled to be listed on the 8th of next month. On the 28th, PNHTech’s closing price was 24,000 KRW. If the closing price is maintained until the conversion date, a 28.24% return can be achieved.
PNHTech, established in 2007, is a specialized OLED materials company. Its main business is research, development, and production of organic electronic materials for OLED displays. Its performance has improved year by year. In 2021, sales and operating profit were 24.1 billion KRW and 3.7 billion KRW, respectively, and last year, they recorded 35 billion KRW and 4.8 billion KRW. As of the third quarter this year, cumulative sales and operating profit were 30 billion KRW and 4.7 billion KRW, up 12% and 54% year-on-year, respectively.
The securities industry expects PNHTech’s growth to continue next year. Jo Jeong-hyun, a researcher at Hana Securities, said, "Starting with the OLED conversion of the iPad Pro next year, the expansion of OLED mass production for automotive and foldable laptops by LG Display, as well as the increase in OLED TV penetration rate, is expected." He added, "PNHTech is expected to benefit from the OLED market growth for many years."
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