Tongyang Life stock drops on news of caution from authorities

2024.04.02 13:02:01 | 2024.04.02 13:02:22

[Courtesy of Tongyang Life Insurance Co.]이미지 확대

[Courtesy of Tongyang Life Insurance Co.]

Shares of Tongyang Life Insurance Co. fell by more than 9 percent on Tuesday following reports that it has been subjected to management caution from the Financial Supervisory Service (FSS) due to its pursuit of new business ventures.

Shares of Tongyang Life Insurance fell 9.08 percent to 5,310 won ($3.9) as of 11:36 a.m. on Tuesday.

According to the FSS on Monday, the life insurer received three instances of management caution last month.

The FSS pointed out issues related to Tongyang Life‘s previous CEO, Zhou Guodan, who spearheaded a tennis court operation venture last year.

The FSS noted discrepancies in the fulfillment of advertising contracts related to this venture and raised concerns about the reasonableness of fees paid to consultants appointed to assist the company’s new CEO as well as uncertainties surrounding the budget execution for supporting the new CEO.

Meanwhile, shares of Kakao, a major South Korean platform operator, also lost ground on Tuesday amid forecasts of underperforming results for the first quarter of this year.

Kakao was trading at 52,000 won as of 11:36 a.m., down 3.35 percent from the previous session.

Daishin Securities projected that Kakao’s first-quarter revenue and operating profit would increase by 22.7 percent and 96.6 percent, respectively, compared to the same period last year, reaching 1.99 trillion won and 122.9 billion won, but falling below market consensus.

“The underperformance in the gaming and music business sectors, coupled with increased labor costs, are likely factors,” Daishin Securities said in a report. “As expectations for improved performance in the core business have been driving the stock price since the second half of last year, a lackluster first-quarter performance may lead to a stagnant period in the earnings season.”

By Pulse

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