[Click e-Stock] "Samyoung M-Tech Expected to See Corporate Value Reassessment with Donga Hwasung Acquisition"

On October 17, KB Securities analyzed that Samyoung M-Tech is expected to undergo a corporate value reassessment following its acquisition of Donga Hwasung. The company did not provide an investment opinion or a target price.

On October 15, Samyoung M-Tech announced through a disclosure titled "Decision to Acquire Shares and Equity Securities of Another Company" that it would acquire 6,664,802 shares (42.18%) of Donga Hwasung held by Lim Kyungsik and two others for 133.29604 billion won. The acquisition price per share is 20,000 won. After the transaction, Samyoung M-Tech’s stake in Donga Hwasung will increase to 43.50%.

Lim Sang-guk, a researcher at KB Securities, stated, "This is a time when a significant increase in performance is expected, centered on shipbuilding and mining plant equipment," adding, "Through the acquisition of Donga Hwasung, which recorded 383.2 billion won in sales and 18.4 billion won in operating profit last year, we anticipate synergies such as business diversification and increased corporate value."

He continued, "Donga Hwasung is evaluated as a company with excellent growth potential and stability, currently generating a reliable cash flow through eight overseas subsidiaries (including India, the United States, and Vietnam), specializing in special rubber for automobiles and home appliances. The combination of Samyoung M-Tech’s nuclear and wind power plant equipment with Donga Hwasung’s hydrogen fuel cells (Donga Fuel Cell), battery gaskets for electric and hydrogen vehicles, and intake/exhaust hoses for eco-friendly energy and mobility items is seen as an attractive way to build a future growth value chain."

He emphasized, "Samyoung M-Tech is expected to see increased results in 2025 and 2026, based on the anticipated revival of the shipbuilding industry, the MASGA project, and steady sales of mining plant equipment. The acquisition of Donga Hwasung is expected to provide a second growth story and a corporate value reassessment. However, with only about 40 billion won in cash on hand, the issue of securing the remaining acquisition funds and the final completion of the acquisition are important factors."