Neuromeka, Stock Rises on Humanoid Expectations as CB Conversion Occurs

Conversion Price for First Tranche CB Set at 28,278 KRW... Investors Expect 20% Return
Continued Stock Conversion of 40 Billion KRW CB Could Ease Financial Burden
Cash Equivalents Remained at 8 Billion KRW as of Q3 Last Year

Investors of Neuromeka's first tranche convertible bonds (CB) have started converting their bonds into shares. This is because the stock price, which had been below the conversion price for some time, surged sharply due to expectations in the humanoid market. Given that the scale of the first tranche CB was as large as 40 billion KRW, continued stock conversion is expected to reduce the company's financial burden.

According to the electronic disclosure system on the 20th, Neuromeka announced that a conversion request for the first tranche CB worth 7.71 billion KRW was made on the 18th of this month. The total shares to be converted amount to 272,649 shares, representing 2.57% of the total shares, with the scheduled listing dates being the 28th of this month and the 6th of next month.

The closing price of Neuromeka on the previous day was 34,500 KRW, while the conversion price is the lowest adjusted price of 28,278 KRW. If the current stock price continues until the CB listing date, investors are expected to gain an evaluation profit exceeding 20%.

The first tranche CB was issued on July 4, 2023, with a scale of 40 billion KRW. Both the nominal and maturity interest rates are 0%. The issuers include Skywalk New Technology Investment Association, DSC Home Run Fund No. 1, among others. Neuromeka issued the CB to use for factory expansion, acquisition of other corporations, and operating funds. As of the third quarter of last year, the company used 6.7 billion KRW for facility funds, 18.4 billion KRW for operating funds, and 2.5 billion KRW for acquiring other corporations. The remaining amount is 12.3 billion KRW.

After issuing the first tranche CB, Neuromeka's stock price did not perform well. The stock price, which rose to 50,000 KRW in September of the same year after the CB issuance, dropped to as low as 18,030 KRW during trading in November last year.

However, the mood changed after issuing a 10 billion KRW CB to POSCO Holdings CVC No. 2 New Technology Investment Association in November last year. The news that POSCO Holdings acquired shares acted as a positive factor. Subsequently, as interest in robot-related stocks increased in the domestic stock market, the stock price continued to rise. Expectations that it would become a future growth engine were fueled by global technology companies such as NVIDIA and Microsoft entering the humanoid robot development competition.

Neuromeka, established in 2013, is a developer of collaborative robots. It produces various robot products in-house, including collaborative robots, autonomous mobile robot (AMR) platforms, and high-speed, high-precision delta robots.

Since the current stock price is above the conversion price, stock conversion is expected to continue. If stock conversion persists, the company's burden is also expected to decrease. As of the third quarter of last year, Neuromeka's cash equivalents were around 8 billion KRW. Had the stock price continued to decline, there could have been financial burdens due to early redemption demands and other factors.