Shares of Doosan Corp., the holding entity of South Korea’s conglomerate Doosan Group, soared nearly 15 percent over the past month on expectation for the planned demerger of its fuel cell and organic light-emitting diode (OLED) material units next month.
According to the company’s plan, Doosan will be divided into Doosan, Doosan Solus and Doosan Fuel Cell at a spin-off ratio of 90.6 percent, 3.3 percent and 6.1 percent on Oct. 18. Market capitalization of Doosan Solus is expected to reach 119.4 billion won ($100.5 million) and that of Doosan Fuel Cell to 65.8 billion won considering Doosan’s closing price on Sept. 10 and the spin-off ratio.
Market analysts estimate the stocks of the two new entities would be revaluated after they are relisted on the stock market. Based on earnings projections, the market capitalization of Doosan Solus would grow between 300 billion won to 640 billion won and that of Doosan Fuel Cell between 278.2 billion won and 615.6 billion won.
Boosted by the rosy outlook, shares of Doosan rose 14.9 percent over the past month to 108,000 won on Monday. On Tuesday, shares of Doosan rose 0.46 percent to close at 108,500 won in Seoul.
The stock trading will be suspended from Sept. 27 to Oct. 17 before the new entities will officially go independent on Oct. 18.
NH Investment Securities predicted that sales of Doosan Fuel Cell would increase from 359.3 billion won last year to 481.6 billion won this year, and the company would swing to operating profit of an estimated 24.8 billion won next year, thanks to the strengthened renewable portfolio standard (RPS), a regulation requiring an increase in the use of renewable energy sources. Doosan Solus will be engaged in battery foil, OLED materials and bio tech businesses after the spin-off.
Market experts said investors should be careful about a temporary stock price fluctuation of Doosan, but its liquidity risk has been resolved as Doosan Construction and Doosan Heavy Industries completed capital increase in the first half of this year, and the company is expected to give high dividend payments.
By Yoo Joon-ho and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]