"Foreign Investors Buy In, While Executives Sell: 'K-Beauty Stock' Soars 87% in Two Months"

Foreign Ownership Rises from 6% to 13%: Stock Surges 87% in Just Over Two Months

Executive Director Gil Namyoung Liquidates 1.07 Billion Won

Six Executives Cashed Out 13.3 Billion Won Last Year

As foreign investors flock to buy shares riding the K-beauty wave, the stock price of Silicontwo has surged sharply, drawing attention to the recent large-scale stock sales by internal executives. Even last year, when Silicontwo’s stock hit record highs, major executives cashed out more than 10 billion won worth of shares as significant insider share sales followed the stock’s rise. This has sparked observations that insiders are repeatedly seeking to realize gains during price rallies.

According to data from the Korea Exchange and the Financial Supervisory Service’s electronic disclosure system on the 14th, Namyoung Gil, Executive Director (Managing Director) at Silicontwo, sold a total of 20,772 shares he held on four occasions from September 1 to September 8 in on-market transactions. The sale price ranged from 48,008 won to 52,350 won per share, with the total proceeds amounting to approximately 1.07 billion won. This sale reduced Executive Director Gil's holding from 70,772 shares to 50,000 shares, meaning he liquidated about 29.4% of his shares in Silicontwo.

The timing of the sale stands out, as it came immediately after Silicontwo’s share price had soared in a short period. On June 26 this year, Silicontwo shares hit the year’s low at 29,850 won during trading, but rebounded rapidly to reach 55,900 won at their peak on September 1. That’s an increase of about 87% from the bottom to the peak in just over two months. Executive Director Gil began to sell his holdings starting September 1, the day the stock marked its highest price.

Slicontwo is a K-beauty distribution company that purchases domestic small and indie cosmetics brand products and sells them to distributors and consumers worldwide. Leveraging its proprietary platform ‘StyleKorean.com’, the company has been expanding its global distribution network, playing a key role in connecting K-beauty brands to overseas markets. For example, indie K-beauty brands like APR and Cellimax have entered the US and Europe through Silicontwo’s network.

With the K-beauty market recently expanding beyond the US into Europe and the Middle East, Silicontwo has been cited as a prime beneficiary of K-beauty’s growth. In particular, as contactless transactions soared during the COVID-19 pandemic, exports of K-beauty products, especially to the US, soared, causing Silicontwo’s stock price to skyrocket after 2023. From the 2,000-won mark at the end of 2022, the stock price surpassed 10,000 won in early 2024, rising more than 20-fold. During this period, annual sales, which were in the 100-billion-won range, surged to exceed 1 trillion won last year.

The recent rally in Silicontwo’s stock has been fueled in part by foreign investors’ active buying. The foreign ownership share of Silicontwo, which was in the 6% range in June this year, has recently doubled to around 13%. On July 27, Glenwood Credit sold its 4.4 million shares via a block deal (off-hours bulk transaction), with a substantial portion acquired by foreign investors. Since then, foreign net buying has persisted, with foreigners posting accumulated net purchases of 4.2 million shares from August 27 to September 8. Notably, on September 1, foreign investors made net purchases totaling 12,932,220,000 won, making Silicontwo the top Kosdaq stock by foreign net buying that day. Silicontwo has consistently ranked among the leading Kosdaq stocks by foreign net purchases in recent weeks.

This is not the first time that Silicontwo’s major executives have sold shares during a stock rally. In June last year, six executives—including Co-CEOs Inho Son and Jinho Choi, Senior Executive Director Sanghee Kim, Executive Director Hyewoon Joo, Chief Technology Officer Jungyu Kang, and Executive Director Gil—together sold 217,480 shares, cashing out around 13.3 billion won. Including sales by CEO Sungwoon Kim and his relatives, the total shares disposed of by insiders reached approximately 25.5 billion won in the same period. Particularly on June 30 last year, five executives sold shares on a single day, totaling about 10.1 billion won in disposals.

The securities industry has also flagged the repeated selling of management’s shares as a risk factor for the stock price. Seungeun Lee, analyst at Yuanta Securities, noted, “The share sales by some executives appear aimed at realizing gains from long-term holdings,” and added, “The market is concerned both about the uncertainty of when further insider selling might occur and about the potential impact on the stock price each time it happens.”

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