Reverse Stock Split Fails to Help: ENEX Posts Quarterly Loss and Sees Share Price Plunge

28 Billion Won Operating Loss in Q1, Turns to Deficit
Share Price Plunges 24% Intraday on First Day of Trading Resumption
Delisting Risk Mounts, "Internal Discussions Underway"

Furniture company ENEX appears to be stuck in a prolonged slump. Despite seeking a breakthrough amid deteriorating market conditions by expanding its business scope and carrying out a stock split in reverse, both its financial results and share price continue to decline.

According to industry sources on May 23, ENEX's sales for the first quarter of this year amounted to 4.66 billion won, down 22.6% compared to the same period last year. During the same period, the company posted an operating loss of 2.8 billion won and a net loss of 3.2 billion won, turning from profit to loss. ENEX explained that the poor performance was influenced by factors such as the war in the Middle East and rising costs.

The announcement of the first quarter results came just days before the trading suspension was lifted following the reverse stock split, further dampening investor sentiment. Previously, on March 5, ENEX decided to conduct a 5-to-1 reverse stock split (face value from 500 won to 2,500 won). As a result, trading was suspended from April 24 to May 19 for about a month, and the first quarter results were announced on May 15, just five days before trading resumed.

On the first day of trading resumption, May 20, ENEX's share price plummeted. Opening at a reference price of 2,140 won, it dropped to as low as 1,621 won (-24.25%) during the session before closing at 1,820 won (-14.95%). On the second day of trading, May 21, the share price continued its decline, closing at 1,627 won, down 10.6% from the previous day.

At the regular general meeting of shareholders on March 26, ENEX amended its articles of incorporation to add product design and interior design as new business objectives, thereby pursuing business diversification. However, these new businesses have yet to take clear shape and remain at the stage of internal discussion.

Industry and market observers are on high alert for the risk of ENEX being delisted as early as the second half of this year. The government has moved to strengthen the delisting of underperforming KOSPI-listed companies and, starting in July, will include "penny stocks" with a share price below 1,000 won as targets for delisting. To prevent companies from circumventing delisting through reverse stock splits, the new policy will also apply to those whose post-split share price remains below the face value, further heightening the sense of crisis surrounding ENEX.

ENEX has yet to present any concrete solutions amid these overlapping challenges. Although defending the share price is an urgent issue, the company has not proposed even short-term measures such as share buybacks, disposals, or cancellations. A representative from ENEX stated, "We are continuing internal discussions on the best way to respond."

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