'Armed with Cash,' Kwangmoo Becomes Second-Largest Shareholder of Daejin Advanced Materials... Accelerates Acquisition of Secondary Battery Company Stakes

Kwangmoo, a KOSDAQ-listed company, has become the second-largest shareholder of Daejin Advanced Materials. Since last year, Kwangmoo has steadily acquired stakes in companies related to secondary batteries. This move is aimed at diversifying its investment portfolio in the materials sector and strengthening its negotiating power for future business cooperation and alliances by increasing potential synergies.

On January 6, Kwangmoo announced that it had completed payment for a third-party allotment capital increase worth 13 billion won in Daejin Advanced Materials on the previous day (January 5). Earlier, on December 19, Daejin Advanced Materials announced through a disclosure that it would allocate 2,966,000 new shares to Kwangmoo as part of the capital increase. The issue price for the new shares was set at 4,354 won, representing a 9.98% discount compared to the reference price of 4,837 won. Considering the public offering price of 9,000 won, Kwangmoo secured its stake at the lowest price range since the company's listing. The new shares are scheduled to be listed on January 22.

With this payment, Kwangmoo has become the second-largest shareholder of Daejin Advanced Materials. The gap in shareholding between Kwangmoo and the largest shareholder is not significant. The largest shareholder of Daejin Advanced Materials is HS Holdings, a private company owned 51% by CEO Yoo Sungjun. After the capital increase, HS Holdings will hold 21.9% (3,901,244 shares) and Kwangmoo will hold 16.7% (2,966,000 shares), with a difference of only 5.2 percentage points between the two parties.

Daejin Advanced Materials, established in 2019, primarily manufactures static electricity prevention trays and coating agents, as well as polyester (PET) release films used in secondary battery production processes. The company has grown by supplying its products to major battery manufacturers such as LG Energy Solution. Recently, it has been accelerating the expansion of its conductive material business based on its proprietary carbon nanotube (CNT) technology. CNT conductive materials are key components that enhance the performance and extend the lifespan of batteries and energy storage systems (ESS).

The company is currently constructing a second plant in Tennessee, USA, for mass production of CNT conductive materials. As global battery manufacturers are increasingly adopting these materials, and since the US plant will feature a vertically integrated one-stop system covering the entire process from raw material design to mass production, the company expects its performance to improve once full-scale production begins.

In the third quarter of last year, Daejin Advanced Materials recorded cumulative consolidated sales of 65 billion won, an operating loss of 2.2 billion won, and a net loss of 10.4 billion won. These results reflect costs related to the KOSDAQ listing initiative on March 6, 2023, and the construction of the US plant. Between 85% and 90% of the company's sales are generated overseas, with the regional breakdown being 50% from the US, 30% from Poland, and 15% from the Philippines.

Kwangmoo has also been steadily increasing its stakes not only in Daejin Advanced Materials but also in Joongang Advanced Materials, which is engaged in the lithium salt business, and Epicamtech, a company specializing in electrolytes and additives. The company's strategy goes beyond simple investment returns, aiming to internalize core technologies and establish a foundation for strategic business alliances. Kwangmoo is also considering additional acquisitions of stakes in related companies, leveraging its abundant cash assets.

A Kwangmoo representative stated, "On the surface, it may appear as an investment in other companies, but from a business perspective, it is a strategic restructuring of our investment portfolio. We are expanding investments centered on core process and materials companies with a view to business cooperation and alliances."

The representative added, "For high value-added businesses that are difficult to operate directly, we have chosen a structure that disperses capital, control, and risk by investing in corporations that have passed investment reviews. We applied the same framework when acquiring stakes in Joongang Advanced Materials and Epicamtech last year, and this latest investment is a continuation of that approach."