This article was published on March 28, 2025, at 12:27 p.m. on the ChosunBiz MoneyMove site.
DNA Link, a genetic information analysis company, has drawn attention by acquiring a building simultaneously with a change in its largest shareholder. DNA Link has not reported a profit since 2017, raising concerns as it acquires a building amid financial difficulties. The company noted last summer that it was pursuing the development of 'rare earth permanent magnets,' unrelated to its existing business.
According to investment banking (IB) industry sources on the 28th, DNA Link announced that it decided to acquire land and a building located in Pil-dong 3-ga, Jung-gu, Seoul from its largest shareholder, Juseong C&E, the previous day. The building is named Juseong Building, with a land area of 528.9 square meters and a scale of two floors below ground and three floors above ground. The acquisition amount is 11 billion won, which accounts for 20% of the total asset value. The company cited 'establishing long-term growth infrastructure for existing and new businesses' as the purpose of the acquisition.
This decision was made shortly after the largest shareholder changed from Orbitech, a company related to nuclear power and aviation, to the global logistics company Juseong C&E. DNA Link announced on the 26th that it completed the payment of the balance for the stock acquisition contract, which involved changing its largest shareholder. It was also decided to change its name to JS Link as a result of the shareholder change.
On the same day, DNA Link decided to proceed with a 5 billion won third-party allocation capital increase. The recipient is Juseong C&E's CEO Park Jin-soo, with new shares expected to be issued at 6,170 won per share for 810,373 shares. This move is intended to secure funds for labor costs and equipment introduction in the permanent magnet production and genomic analysis industries. The company also specified that all funds would be used within this year.
The new largest shareholder Juseong C&E is estimated to have sufficient financial capacity as it secured about 24 billion won of the total acquisition amount with 100% of its own funds. Juseong C&E's total assets for the 2024 settlement of accounts are 141.2 billion won, with sales and net income reaching 215.2 billion won and 10.1 billion won, respectively. Nevertheless, shareholders are concerned because the company acquired a building immediately after the influx of funds from the largest shareholder.
DNA Link announced in July of last year that it would pursue a rare earth-based permanent magnet business. In the same month, it signed a contract to acquire a factory for 10 billion won for production and carried out the issuance of convertible bonds (CB) worth 8 billion won each and a capital increase. The company also appointed Kenji Goni Shi, a former vice president of JLMAG, one of China's leading rare earth companies, as an executive director. Since December 2024, it has been posting monthly newsletters on the progress of the new business on its website.
DNA Link recently received an unqualified audit opinion from the external auditor Daesung Accounting Corporation. There were no concerns raised regarding the going concern uncertainty.
However, the business environment is not favorable. The company has recorded operating losses for seven consecutive years and posted an operating loss of 8.8 billion won last year, marking its largest deficit since its establishment. As of last year, accumulated losses exceeded 86 billion won, and due to unsatisfactory disclosures, the accumulated penalty points in the past year have reached 9.5.
Moreover, DNA Link has lost control over its profitable subsidiaries. This is due to the prior largest shareholder Lee Jong-eun and Enter Media selling the company to its previous largest shareholder Orbitech, taking with them the valuable subsidiaries 국민비투멘 and L&C BIO.
The marine cargo transportation company 국민비투멘, acquired for 9.6 billion won, was sold for 7.9 billion won, while the biotechnology equipment sales company L&C BIO, acquired for 3.5 billion won in 2018, was transferred for 1.5 billion won. As of the end of 2023, the net income of the two companies was 2.4 billion won and 317.58 million won, respectively. Among the eight subsidiaries and related companies of DNA Link, only two reported net profits.
Despite the situation at DNA Link, the seller Orbitech is expected to have earned three to four times its profit in just over a year. After participating in the third-party allocation capital increase in November 2023, Orbitech became the largest shareholder and increased its stake to 21.1% through convertible bond issuance and other means. The cash investment in this process is estimated at 9 billion won, and when combined with the 24 billion won management rights sale price and profits from CB investments, it is expected to have recovered around 30 billion won.