Park Systems, listed on the KOSDAQ market, announced a first-quarter earnings surprise. The tentative revenue for the last quarter doubled compared to the same period last year, and operating profit turned into a surplus of 13.1 billion won.

What drew attention amid the improved performance was the stock price movement of Park Systems. Since entering the KOSDAQ market in 2015, Park Systems has been a rare 'long-term upward' stock in the domestic stock market. The stock price of Park Systems, which was in the 80,000 won range at the time of listing, has now exceeded 230,000 won. Although there have been short-term adjustments, the stock price has steadily increased.

Founded by CEO Park Sang-il, who graduated from the Department of Physics at Seoul National University and earned a Ph.D. from Stanford University in the U.S., Park Systems creates atomic force microscopes (AFM). The atomic force microscope, capable of observing a world measured in nanometers (1 nm = 1 billionth of a meter), is used in the semiconductor, bio, and secondary battery industries. Not only domestic corporations such as Samsung Electronics, SK hynix, Hyundai Motor, and LG, but also global companies like Micron, IBM, Toyota, Toshiba, as well as world-renowned research institutions like Harvard University and Stanford University are clients of Park Systems.

However, the stock price movement of Park Systems cannot simply be explained by business competitiveness. Experts have noted the company's unique governance structure, compensation policy, and shareholder returns as factors contributing to the stock price increase.

Park Systems' atomic force microscope. /Courtesy of Chosun DB

The roots of Park Systems were planted in 1988 in Silicon Valley, USA. CEO Park established a company called PSI that made special microscopes, becoming the first in the world to develop such technology. These microscopes, costing tens of millions of won each, were sold to laboratories and corporations, and the company grew rapidly. After selling PSI, CEO Park returned to Korea and founded Park Systems in 1997.

PSI went through several ownership changes and eventually fell under Bruker, which, based on PSI's technological expertise, now has a world-class atomic force microscope division.

When Park Systems went public on the KOSDAQ market 10 years ago, Bruker was the number one player in the atomic force microscope market, holding 45% of the market share, but has since slipped to the second position behind Park Systems. According to QY Research, as of the end of 2023, Park Systems ranks first in the global AFM market with a market share of 20.3%, while Bruker follows closely with 18.8%. Both the first and second-ranked AFM companies were born from CEO Park's hands.

Park Sung-soon, a researcher from the Korea Investor Relations Service, diagnosed, 'While competitors like Bruker focus on improving existing technologies, Park Systems shows differentiated competitiveness by developing products specialized for non-contact methods.'

As demand for atomic force microscopes increased, Park Systems' performance steadily improved. When it was listed a decade ago, Park Systems was a loss-making company with revenue of 15 billion won. At that time, it successfully went public through the technical listing system.

CEO Park utilized the funds raised from the IPO to expand the overseas sales network and research personnel. Having steadily grown, Park Systems recorded 175 billion won in consolidated revenue and 38.5 billion won in operating profit last year. This year, revenue is expected to exceed 200 billion won.

Park Systems board of directors composition. /Courtesy of Park Systems

Experts also point out that Park Systems' unique governance structure, which is rare in Korea, is a contributing factor to the rise in stock price. Park Sang-il, who is the largest shareholder, leads a board of directors comprised of seven members, six of whom are outside directors.

The board of directors includes a compensation committee that decides on the treatment and compensation of executives and an audit committee that oversees internal affairs, such as accounting. The compensation committee includes Han Jeong-hwa, a professor at Hanyang University, Jung Joon from SOLiD, and Choi Gi-young, a professor emeritus at Seoul National University, while the audit committee comprises Park Gi-jun, an accountant at UMC (Woori Accounting Corporation), Chae Seung-ki, a technology committee member at LG Display, and Lee Hee-guk, former president of LG. These outside directors are long-serving experts in their technical fields.

The expertise of the management team is also highly regarded. Yoo Young-guk, who founded the U.S. component and materials company Intematix, is leading the future business development at Park Systems, while Lee Dong-chun and Cho Sang-jun, both executives, are responsible for the industrial equipment and research equipment divisions, respectively. The company’s operations management is handled by financial expert Cho Yeon-ok.

CEO Park's child, Jin-sung, holds a small stake in the company but does not participate in management. This is why the unique discount phenomenon seen in Korea, often related to succession issues, does not appear in Park Systems.

The shareholder return policy, which has consistently expanded dividends as corporate profits have increased, is also considered 'textbook' standard. While the company states it prioritizes investments for growth, it also implements share buybacks and consistent dividends. The annual dividend amount is decided by the board of directors, based on 10-50% of surplus cash (based on separate profit and loss), with a dividend payout ratio of around 15% annually.