Hanmi Semiconductor vice chairman and CEO Kwak Dong-shin saw a huge valuation margin from his investment in fab equipment maker HPSP made two years ago, TheElec has learned.
Kwang and Hanmi Semiconductor together bought 25% of the stock in the private company HPSP. Each spent 37.5 billion won for 12.5% of shares in the fab equipment maker.
HPSP was valued at around 300 billion won at the time. The company was listed on Kosdaq in July 2022.
HPSP saw strong earnings last year and also made a bonus issue of 3 shares per 1 which propelled its share price increase. As of Wednesday, the company was valued at 1.87 trillion won, given that the bonus issue will also be listed.
This means Kwak’s shares in HPSP have increased by 6.2 times in valuation, giving him a margin of around 1500 billion won.
The CEO cashed out 187,423 shares from March 14 to 16 before the bonus issue and secured 10.7 billion won.
This is unusual as normally as most people in his situation would cash their shares after the bonus issue, which means he likely needed the cash for personal reasons, a source familiar with the matter said.
Kwak now holds 7.53 million shares in HPSP, or around 9.28%, which is worth 172.9 billion won.
Meanwhile, Hanmi Semiconductor owns 8.28 million shares, valued at 192.1 billion won. The company last week said in its filings to local regulators that it was now a regular investor in HPSP rather than a management partner. This likely means Kwak and the company is more likely to sell that shares in HPSP.
HPSP executives and employees have also exercised their stock options since the listing. HPSP CEO Kim Yong-woon used 300 million won worth of this stock option in September, his remaining shares in the company is still valued at around 8.9 million won. There are 25 employees in total that HPSP has given stock options.
HPSP makes low-temperature, high-pressure hydrogen annealing equipment. These are used to improve the interface characteristics of semiconductor devices that use high-k insulator films. Advanced logic chips adopt this process in their production while the memory sector is also increasing their use of the equipment.
HPSP is the sole vendor of the equipment. The company recorded 159.3 billion won in revenue and 85.1 billion won in operating profit last year, an increase of 73% and 88% from 2021.