KX Innovation Decides to Acquire and Cancel All Treasury Shares to Enhance Shareholder Value

KOSDAQ-listed company KX announced on April 23 its decisions to acquire treasury shares and to cancel shares.

According to the disclosure, KX plans to acquire its own shares through on-market purchases over a two-month period from April 23, 2025, to June 23, 2025. Once the acquisition is complete, all of the acquired shares will be cancelled.

In February 2025, KX had previously announced its 'Corporate Value Enhancement Plan' through a voluntary disclosure. The '2025 Corporate Value Enhancement Plan' outlined the following: ▲ share buyback and cancellation ▲ strengthened IR communication ▲ enhanced disclosure transparency. The disclosure made on the previous day is a follow-up to the 'share buyback and cancellation' initiative. At that time, the company announced that the shareholder return policy would be implemented in the second quarter of 2025, and it plans to fulfill this commitment. The number of shares to be acquired is 516,130 common shares.

Prior to this disclosure, KX Innovation had consistently acquired and cancelled its own shares. In 2020, it cancelled 200,000 shares. In 2021, it acquired 3,460,000 shares through a public tender offer. In 2023, it purchased 380,000 shares on the KOSDAQ market. The purpose of all these acquisitions was to enhance shareholder value.

As another measure to enhance shareholder value, KX has also paid annual cash dividends, thereby increasing its shareholder return ratio. Last year, the company paid a dividend of KRW 190 per share (with a dividend yield of 5.7%).

Market experts are also evaluating these actions positively. Following the announcement of KX Innovation's share cancellation plan, shareholder trust has been recovering. In addition, expectations for improved performance and business diversification are having a positive impact on share price stability.

Park Jongseon, a researcher at Eugene Investment & Securities, stated, "Based on this year's projected performance, KX Innovation is undervalued with a PER of 4.9 times, compared to the industry average of 13.4 times." He also analyzed, "If share cancellation and earnings growth occur together, there is a high possibility of a corporate value re-rating." He estimated that "KX Innovation will achieve record-high consolidated sales of KRW 444.8 billion and operating profit of KRW 72.6 billion in 2025." As investment points, he highlighted ▲ the earnings recovery of KX's subsidiaries KX Hitech and KX Intech ▲ the increase in golf course operating results at Club72CC, Shilla Leisure, and PajuCC, which the company operates, as they enter the peak season.

A KX Innovation official stated, "This decision to repurchase and cancel treasury shares demonstrates our commitment to prioritizing 'coexistence with shareholders' as our highest value, even amid an uncertain global economic environment." He added, "We announced our shareholder return policy in February, and have fulfilled that promise in the second quarter."

He continued, "Going forward, we will continue to fulfill our commitments step by step, thereby increasing the company's credibility. In parallel, we will actively pursue expansion into new businesses based on a solid financial foundation."