[Special Stock] Dongwon Industries Rises on Expectations of Increased Corporate Value...Hits New High

Dongwon Industries saw an upward trend on expectations of increased corporate value, hitting a new 52-week intraday high.

As of 9:21 a.m. on July 2, Dongwon Industries was trading at 51,600 won on the Korea Exchange, up 700 won (1.38%) from the previous day. During the session, the stock rose as high as 55,400 won, setting a new 52-week high.

On this day, KB Securities initiated coverage of Dongwon Industries with a target price of 87,000 won and a "Buy" investment rating. Park Geonyoung, a researcher at KB Securities, explained, "One of the discount factors for holding companies is the issue of overlapping listings. Dongwon Industries has resolved this by deciding to make Dongwon F&B, its listed subsidiary, a wholly-owned subsidiary through a comprehensive share swap, and to delist Dongwon F&B in order to enhance shareholder value." He added, "Based on the stable cash flow generated from its tuna business, Dongwon Industries is preparing new growth drivers through investment in fishing technology, expansion of its food-related product lines, and overseas expansion of existing products."

The resolution of legal issues involving StarKist is also a positive factor. StarKist, wholly owned by Dongwon Industries, holds the No. 1 market share in the U.S. canned tuna market. Park noted, "StarKist had been involved in a price-fixing lawsuit, but the issue has now been fully resolved with the payment of a settlement of about 300 billion won. Considering the expectations for new business following the resolution of the lawsuit and StarKist's growth potential, it is necessary to reasonably reflect StarKist's value." KB Securities estimated StarKist's corporate value at a minimum of 1 trillion won.