Align Pressures Coway Again for 'Value-Up'... "Respond by the 30th"

Activist fund Align Partners Asset Management (Align) has once again pressured the board of Coway, the leading company in Korea's rental industry, to enhance corporate value (value-up).

On the 14th, Align reiterated, "We are demanding specific supplementary measures in response to the second public shareholder letter sent at the end of last year, by January 30." The firm further emphasized, "If there is no meaningful announcement of the company's position, as an institutional investor holding more than 4% of shares, we are considering various ways to faithfully fulfill our role as a shareholder at the upcoming regular general shareholders' meeting, so that the collective will of shareholders is properly reflected."

Previously, on December 15 of last year, Align sent its second public shareholder letter to the Coway board, containing seven proposals to enhance shareholder value, and officially requested the announcement of a corporate value enhancement plan reflecting the contents of the letter.

Align pointed out that despite Coway's unrivaled market position and strong performance, its stock price remains chronically undervalued.

Align called for the presentation of mid- to long-term valuation (stock price relative to corporate value) and return on equity (ROE) targets, the concretization of target capital structure policies, updates to shareholder return policies, and the strengthening of IR (investor relations) and shareholder communication. The demands also included improvements in governance. Align argued that the board's independence should be increased, potential conflicts of interest with the largest shareholder should be resolved, and executive compensation should be linked to the stock price to align the interests of shareholders and management.

Align stated, "If it is practically difficult to make a specific announcement by January 30, as was the case last year, an alternative would be to first announce the status of implementation of the corporate value enhancement plan, whether there will be any revisions, the schedule, and the method, and then release the details later." The firm added, "However, considering the schedule of the regular general shareholders' meeting, the relevant announcement must be completed by the end of next month at the latest to ensure shareholders have at least a minimum review period before the meeting."