Equity Stake Increased from 12.42% to 18.05%
KCGI Stake Decreased from 7.05% to 1.42%
Dividend Payout Ratio and Treasury Stock Expanded... Shareholder-Friendly Measures Implemented
DB Inc., the holding company of the DB Group, announced on the 28th that it has purchased a 5.63% stake in its subsidiary foundry (semiconductor contract manufacturing) company DB HiTek from KCGI.
DB Inc. disclosed the previous afternoon that it acquired 25 million shares (5.63% stake) of DB HiTek from KCGI’s investment purpose company Caropy Holdings through an off-hours block trade for 165 billion KRW. The company stated that the purpose of the acquisition is to "secure stable management control and achieve mid- to long-term investment returns."
DB Inc.’s stake in DB HiTek increased from 12.42% to 18.05% (common shares), while KCGI’s stake decreased from 7.05% to 1.42%.
Earlier, in March, KCGI had acquired a 7.05% stake in DB HiTek. Claiming that DB HiTek’s corporate value was undervalued, KCGI demanded share buybacks and strengthening of board independence from DB.
Along with DB Inc.’s disclosure, DB HiTek also announced a management innovation plan focused on improving governance and strengthening shareholder-friendly policies.
As part of the governance improvement plan, DB HiTek proposed separating the roles of CEO and board chair, establishing internal committees such as the Audit Committee and Compensation Committee, and enhancing audit functions. The plan aims to increase board independence and strengthen internal controls. The number of Audit Committee meetings will be increased, and independent meetings between the Audit Committee chair and external auditors will be held.
As a shareholder-friendly policy, DB HiTek announced it will maintain a shareholder return ratio in the 30% range through share repurchases, cancellations, and dividends.
The dividend payout ratio is planned to be expanded from the previous 10% up to a maximum of 20%. The current treasury stock ratio of about 6% will be increased to 15%, with plans to return more than 30% of net profit to shareholders. The dividend procedure will also be improved by first determining the dividend amount at the shareholders’ meeting and then setting the dividend record date.
DB HiTek stated that by 2030, it will invest 4.7 trillion KRW in next-generation power semiconductors and other areas to increase sales from the current 1 trillion KRW to 4 trillion KRW, achieve an operating profit of 1 trillion KRW (operating margin of 25%), and reach a market capitalization of 6 trillion KRW.
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