1. What is Yulho’s Rights Offering?

On August 20th, Yulho announced a rights offering to its largest shareholder, issuing 1,760,563 common shares at ₩568 per share. This aims to raise approximately ₩1 billion for new business investments and operating expenses.

2. Why is Yulho Raising Capital?

Yulho is currently pursuing various new ventures, including battery recycling, waste treatment, AI, and mineral resource development. The rights offering aims to secure funding for these investments and improve the company’s financial structure. Despite recent revenue growth, Yulho has recorded operating losses and high debt ratios, necessitating financial stability measures.

3. How Will the Rights Offering Affect Yulho’s Stock Price?

  • Positive Aspects: Raising capital can improve Yulho’s financial health and fund expansion into promising new sectors, contributing to long-term growth. The major shareholder’s participation signals commitment and confidence in the company’s future.
  • Negative Aspects: The offering price of ₩568 is significantly lower than the current market price of ₩1,797, raising concerns about stock dilution. This could put downward pressure on the stock price in the short term.

4. What Should Investors Do?

Investors should carefully evaluate the specific use of proceeds and the growth potential of Yulho’s new businesses. Monitoring key financial metrics after the offering and tracking the actual performance of new ventures are crucial. Pay close attention to stock price fluctuations around the new share listing date on September 12th.