[Click eStock] "Isu Petasys Capital Increase, Difficult to Understand... Investment Opinion Neutral"

Meritz Securities on the 11th downgraded its investment opinion on Isu Petasys from Buy to Hold, and lowered the target price from 54,000 KRW to 32,000 KRW, stating that "the recent rights offering is an incomprehensible decision from an investor's perspective." The closing price on the 8th was 31,750 KRW.

On the same day, Yang Seung-su, a researcher at Meritz Securities, said, "The downside risk caused by this rights offering is greater than the simple impact of earnings per share (EPS) dilution. While the company's core business performance outlook remains optimistic, a conservative investment judgment is required at this point."

Earlier, on the 8th, Isu Petasys announced a rights offering to issue 20.1 million new shares (31.7% of issued shares) at a planned issue price of 27,350 KRW per share. The company plans to raise approximately 55 billion KRW in funds to be used for facility investment (25 billion KRW), acquisition of securities of other corporations (29.98 billion KRW), and other purposes. In particular, along with this rights offering, the company also announced a new facility investment worth 40 billion KRW and the acquisition of management rights of J.O., a specialized manufacturer of secondary battery carbon nanotube (CNT) materials, worth 30 billion KRW.

Researcher Yang pointed out that investor doubts regarding the appropriateness of the J.O. acquisition need to be resolved. He added, "Isu Petasys shareholders invested to share in the high growth of AI-based multi-layer board (MLB), not secondary batteries. Since this is a rights offering through shareholder allocation, investor consensus is necessary."

He also emphasized, "There are no investors doubting the future growth potential of electric vehicles, but growth is currently slowing due to a chasm (temporary demand stagnation). Especially, J.O.'s major customers are facing difficulties such as cancellation of long-term supply contracts. Concrete background and review details for persuasion, as well as specific communication about mid- to long-term growth potential, are needed."