DawonSys Announces 40 Billion KRW Rights Offering to Shareholders... "Preparing for the 8 Trillion KRW High-Speed Rail Market"

Daewon Sys announced on the 25th that ahead of a 40 billion KRW shareholder allocation paid-in capital increase, it will engage in research and development (R&D) and investment to prepare for the expected high-speed rail replacement demand estimated at 8 trillion KRW over the next five years.

According to the Financial Supervisory Service's electronic disclosure, Daewon Sys decided in February to conduct a paid-in capital increase worth 39.8 billion KRW through a shareholder allocation followed by a general public offering of forfeited shares. The funds secured through this capital raising will be invested in development costs for high-speed rail vehicles and operating funds such as raw material purchase payments to ensure stable and uninterrupted delivery in line with future customer investment plans.

A Daewon Sys official stated, “Considering the limited domestic market as a domestic railway vehicle manufacturer, high-speed rail is a business that can expect higher margins compared to general electric trains, making entry into the high-speed rail vehicle market an essential decision.” He added, “The decision to proceed with this paid-in capital increase was also made because the replacement period for high-speed rail vehicles is imminent, and from this year through 2026, orders for the EMU-260 project are expected, with the order size anticipated to exceed 1 trillion KRW.”

He continued, “Starting from this, approximately 8 trillion KRW worth of high-speed rail replacement demand is expected over five years, necessitating R&D investment and commercialization preparations to respond accordingly.”

Daewon Sys operates primarily in the special power supply device business and railway vehicle business. It manufactures and supplies key electrical components such as propulsion control devices for electric trains, auxiliary power units (SIV), and passenger cabin air conditioning units. Leveraging competitive technological capabilities, it has continuously achieved railway vehicle order successes.

Beginning with the order for 200 cars for Seoul Metro Line 2 in March 2015, Daewon Sys has been recognized as a complete vehicle manufacturer by securing orders for 40 cars on the Daegok~Sosa Line, 196 cars on Lines 2 and 3, 87 cars on the Shinansan Line, 150 and 208 cars for the EMU-150 commuter electric trains, 210 cars for Line 4, the Busan Oryukdo Line tram, 298 cars for Lines 5 and 8, the extended sections of Incheon Line 1 and Seoul Line 7 Cheongna, and an additional 216 cars for Lines 5 and 7 last year. Through its experience in securing 358 cars of the quasi-high-speed EMU-150, Daewon Sys has built competitiveness for entering the high-speed rail market and is currently preparing to enter this market based on these references.

In addition to its existing businesses, Daewon Sys has developed power supply devices, which are core components of semiconductor front-end equipment, through years of development with global semiconductor manufacturers.

A Daewon Sys official said, “There are very few companies in Korea that manufacture and supply equipment used in the front-end process, and the power supply devices developed by our company can significantly improve yield in the critical processes of the front-end.” He added, “Currently, these devices are installed in equipment from leading global semiconductor equipment manufacturers and have entered mass production lines of the largest semiconductor manufacturers. We expect rapid business expansion and demand for hundreds of power supply units annually.”

Furthermore, two Daewon Sys subsidiaries are currently undergoing KOSDAQ IPO listings. Subsidiary Daewon Nexview operates in the production of equipment such as semiconductor probe cards, OLED, and semiconductor packaging equipment based on laser technology in the ultra-precision bonding field. Its core product, the Laser Micro Bonding equipment, uses lasers to perform ultra-precision bonding of probe pins thinner than a human hair. Daewon Nexview submitted its preliminary listing review application last November, passed the KOSDAQ preliminary review in February this year, and is expected to complete its listing within the first half of this year.

Another subsidiary, Daewon Medax, has developed a core technology called BNCT (Boron Neutron Capture Therapy) and is currently conducting Phase 1 clinical trials. BNCT is a cancer treatment method that selectively destroys cancer cells using boron drugs and medical accelerators. Compared to conventional radiation therapy, it uses low-energy neutrons that are safer for patients, enabling treatment goals to be achieved with just a single session, thereby improving patients’ quality of life with this groundbreaking technology. Daewon Medax is successfully progressing through Phase 1 clinical trials and received A grades from two evaluation agencies in the technology evaluation for special listing last November. It is aiming for a listing in the third quarter of this year.