Economic analyst Seon Dae-in will invest 3 billion won in the telecommunications equipment company Joongang Advanced Materials. Seon, who has 400,000 YouTube subscribers, has introduced Joongang Advanced Materials as a stock related to battery materials to investors.
Seon once ran in the primary election for the mayor of Yongin while a member of the Democratic Party of Korea in the 2018 local elections, and recently it was reported that he would participate as a planning advisory member in the future economic growth strategy committee organized by the Democratic Party of Korea. Following the news of Seon's investment, Joongang Advanced Materials saw a significant increase of 21.94% in a single day on the 15th.
However, contrary to Seon's explanation, the Democratic Party of Korea has revealed that it is not true that Seon will participate as a planning advisory member in the future economic growth strategy committee. A party official noted, "It is true that he was initially mentioned as a participant, but it has been decided that he will not participate in the end."
Joongang Advanced Materials announced on the 14th that it has decided to increase capital through a third-party allotment to secure 10 billion won for operational funds. According to the rights offering, 2.76 million shares will be newly issued at the price of 3,624 won. The new shares will be listed on June 4, and will be subject to a transfer restriction for one year after listing. Of the newly issued shares, 70% will be allocated to Avenue Partners, with the remaining 30% assigned to Seon and his wife, Kim Tae-hyun.
In relation to this, Seon's side stated, "Joongang Advanced Materials is working with Enchem, an electrolyte company, to establish a joint venture called EDL to produce lithium salt, the raw material for electrolytes," and added, "I invested because I viewed it as a promising investment opportunity, given that Joongang Advanced Materials' stock price has significantly declined since the second half of last year."
As Seon, who has actively recommended investments in secondary battery stocks along with the writer Park Soon-hyuk, also appeared, investors' interest focused on him.
The KOSDAQ market has been reacting sensitively to the movements of presidential candidates lately. As interpretations emerged that Seon could become a 'brain' for candidate Lee Jae-myung in the economic field, retail investors flocked to Joongang Advanced Materials.
He has identified Joongang Advanced Materials as a secondary battery-related stock in videos posted on his YouTube channel. Last month, he also relayed to his subscribers that Joongang Advanced Materials announced plans to pursue lithium salt-related businesses at its shareholders' meeting in the Saemangeum industrial complex.
In this regard, Seon's side argued, "We have publicly expressed our opposition to theme stock investments numerous times," adding, "It is absurd to claim that we invested with the intention of engaging in a political theme stock." He added, "Even if the stock price rises due to being intertwined with political theme stocks, funds will be tied up in a protective custody for a year, therefore the likelihood of gaining profit is extremely low."
However, experts explain that contrary to Seon's explanation, it seems ambiguous to classify Joongang Advanced Materials as a secondary battery-related stock based on the company's business content. Most importantly, the revenue share from secondary battery-related businesses is minimal. According to last year's figures, 95% of Joongang Advanced Materials' revenue came from the sale of construction materials and telecommunications equipment. Additionally, Joongang Advanced Materials is engaged in the distribution business of materials and supplies by purchasing and selling lithium salts, which only accounts for a mere 4% of revenue.
The company stated it would build a factory in the Saemangeum industrial complex to pursue lithium salt business. If plans proceed as scheduled, construction is to begin this year on the first phase, with completion expected after three phases next year.
Previously, Seon also invested funds in the KOSDAQ-listed company GemVax. In November last year, GemVax announced that it would issue convertible bonds to Seon and his wife, with an investment scale of 4.5 billion won each, totaling 9 billion won.
At that time, Seon said, "After recently visiting GemVax, an opportunity to participate in the BW happened to arise, and I decided swiftly within a day or two," and added, "I invested with considerable risk." Following news of Seon's investment, GemVax's stock price also rose significantly. The stock price rose from around 15,000 won in early December to about 30,000 won recently.
Interest is also growing in Seon's past investment history as he invested in the mezzanine issued by the listed company and participated in the capital increase. According to financial authorities, Seon purchased 83,837 shares of Kumyang, where writer Park Soon-hyuk previously served as a public relations director.
In this context, the Financial Supervisory Service's capital market special criminal investigation (special investigation team) suspected that writer Park informed Seon of undisclosed information, thus allowing him to gain undue benefits, and conducted searches of Seon and Park's homes for violations of capital market laws. However, no further actions have been taken in this regard.
Kumyang, where writer Park and Seon recommended investments and Seon also invested directly, is currently at risk of delisting. The company has received an 'opinion rejection' from an external auditor, resulting in the occurrence of grounds for delisting, and it has submitted an objection to the Korea Exchange. The delisting decision is expected to be made around mid-next month.