Trustonm Asset Management, the second-largest shareholder in Taekwang Industrial, has objected after the company said it would use its treasury shares as a means for mergers and acquisitions (M&A) rather than cancel them. Trustonm pointed to Taekwang Industrial's low shareholder return rate as the reason its price-to-book ratio (PBR) stands at just 0.2, and announced plans to bring the matter into public debate.
Regarding Taekwang Industrial's recently disclosed "2026 Corporate Value Enhancement Plan," Trustonm criticized it as "a report without quantitative targets or the will to implement measures that would resolve the undervaluation." It added, "The fact that Taekwang Industrial did not present a single quantitative target directly distorts the purpose of the value-up program."
In its corporate value enhancement plan, Taekwang Industrial said it would use 271,769 treasury shares (a 24.4% stake) as a means of exchange for strategic M&A. Rather than raising shareholder value by reducing the number of outstanding shares through treasury share cancellation, the company revealed plans to use them as funding for business expansion through M&A. In response, Trustonm objected, saying, "To use treasury shares as a means of exchange in M&A, the stock price must be properly valued in the market." It added, "Disposing of treasury shares at a PBR of 0.22 means handing over shareholder assets worth four to five times their intrinsic value at a bargain market price."
Trustonm also pointed out that the value-up plan lacks concrete quantitative targets such as dividend payout ratio and total shareholder return (TSR), and that of the 1.5 billion won in year-end dividends for 2025, only 500 million won (0.06% of market capitalization) goes to general shareholders. Trustonm demanded that Taekwang Industrial's board reconsider its corporate value enhancement plan, stressing that the revised plan should include a written principle of phased treasury share cancellation and a resetting of return-on-equity (ROE) targets exceeding the cost of capital.
"Even if laws and systems are put in place, advancing the capital market will be impossible if companies persist with roundabout methods," a Trustonm official said. "We will send an open shareholder letter to Taekwang Industrial's board next week, containing the problems in the decision-making process that produced the corporate value enhancement plan and quantitative requirements to secure the board's independence."
