Dongwon Fisheries Largest Shareholder to Directly Increase Stake...Initiates Value-Up Drive to Resolve Historic Undervaluation

Dongwon Fisheries is set to embark in earnest on strategies to enhance its corporate value, aiming to address the gap between its intrinsic value and current share price. Following the recent formalization of efforts to strengthen communication with the market, the largest shareholder and company management have taken concrete steps to restore shareholder value by directly increasing their equity stake.

According to the electronic disclosure system on June 23, Dongwon Fisheries announced that its largest shareholder and management will acquire treasury shares equivalent to 2% of the company’s total shares.

This decision reflects management’s view that Dongwon Fisheries' current share price is excessively low compared to its earnings and asset value, as well as their confidence in the company’s future growth potential. Instead of a corporate-level buyback, the largest shareholder has chosen to inject personal funds to increase their stake, signaling to the market a strong commitment to responsible management and share price support.

In reality, Dongwon Fisheries' corporate value remains low compared to industry peers. The company's book value per share (BPS) stands at around 12,115 won, but its price-to-book ratio (PBR) is only about 0.5, meaning shares are trading at roughly half the net asset value. Its price-to-earnings ratio (PER) is approximately 3.4, which is significantly lower than major competitors such as Hansung Enterprise (165x) and Sajo Industries (70x).

The market is paying close attention to Dongwon Fisheries' improving performance. The company posted an operating loss of 19.4 billion won on a consolidated basis in 2023, but achieved an operating profit of 5.3 billion won in 2024, successfully returning to profitability. Last year, the company recorded sales of 172.6 billion won, operating profit of 8.8 billion won, and net profit of 7.7 billion won, proving a fundamental improvement in its profit structure.

This performance turnaround is rooted in the company’s competitive strength in deep-sea fishing built since 1970, and its “one-stop value chain.” Dongwon Fisheries has established a system that allows it to manage everything in-house, from fishing operations to food processing and cold-chain logistics, thus strengthening its ability to respond to external factors such as raw material price fluctuations and oil price volatility.

Furthermore, Dongwon Fisheries' strategic partnership with Sanford, New Zealand’s largest fisheries company, which has lasted over 40 years, and its exclusive transferable individual fishing quotas, are cited as key differentiators for the company.

The company has also secured new growth engines. The New Zealand trawler “DW NOVA (2,342 GT),” which departed from Denmark and arrived at Busan Port this February, is scheduled to commence full-scale operations after facility upgrades are completed.

DW NOVA is considered a core asset that will improve operational efficiency, reduce risks related to weather and fishing conditions, and enhance the stability of the company’s performance. Its results will start to be reflected in the second half of this year, with a full-year impact expected to materialize next year.

Industry experts see the largest shareholder’s equity purchase as a signal to resolve Dongwon Fisheries’ undervaluation. With additional shareholder return measures under consideration, the likelihood of a corporate value re-rating is seen to be increasing.

A Dongwon Fisheries representative stated, “Restructuring in line with global standards and normalization of our results have already been proven by the numbers. Now is the time to focus all our resources on restoring our undervalued share price to a normal level relative to the company’s value.”

The representative added, “Starting with the largest shareholder’s additional purchase, we will demonstrate the company’s true value through action, not words, and do our utmost to maximize shareholder value through shareholder return policies.”

Dongwon Fisheries plans to continue its drive to enhance corporate value and receive proper market recognition, based on responsible management by the largest shareholder, improved performance, and new growth drivers.

This content was produced with the assistance of AI translation services.