[Market Focus] Samhwa Paint Surges 16% on Potential Management Dispute

Samhwa Paint has surged for two consecutive trading days following the passing of its largest shareholder, Chairman Kim Jangyeon.

As of 9:30 a.m. on December 19, Samhwa Paint was trading at 9,210 won, up 1,280 won (16.14%) from the previous trading day.

The stock closed at 7,390 won the previous day, up 30%, marking a strong performance for two straight trading sessions. This rally is interpreted as reflecting expectations of changes in the company's governance structure following Chairman Kim's passing.

Chairman Kim held a 22.76% stake in Samhwa Paint. Among his one son and one daughter, the eldest daughter and likely successor, Vice President Kim Hyunjung, holds only a 3.04% stake. Chairman Kim's elder sister, Kim Kwiyeon, also owns a 1.5% stake. There is speculation that if some shares are sold to pay inheritance taxes in the future, the combined stake of Chairman Kim and his related parties could decrease further.

While it is highly likely that Vice President Kim, who previously received shares as a gift, will inherit most of the late Chairman's stake, there are also projections that the family of the late Yoon Heejung, the company's co-founder and former chairman, could become a variable in the succession process, as their stake is also significant. Although the Yoon family is currently excluded from management, they hold a 20.1% stake.

Recently, Samhwa Paint had just begun the process of succession centered on Chairman Kim's eldest daughter, Vice President Kim Hyunjung. After joining the company in 2019, she was promoted to vice president in December last year and joined the board of directors in March this year. In May, she received a 3% stake as a gift from Chairman Kim and currently holds a 3.04% stake.