LVMC Shows Strong 2025 Earnings but Faces Dilution Risk from 30B KRW Convertible Bond and Persistent Governance Gaps
FY2025 consolidated revenue reached KRW 393B, operating profit KRW 38.5B, net profit KRW 14.7B, marking a strong growth and sustained profitability improvement.
Issued KRW 30B convertible bonds in October 2025 (KRW 15B for facility, KRW 15B for working capital). Potential dilution upon conversion, increasing share count.
No dividends for past 5 years; no formal shareholder return policy. Conducted a 1:0.4 free stock issuance in 2022.
Non-compliance with 10 out of 15 key corporate governance indicators: convocation less than 4 weeks before AGM (15 days), no e-voting, no dividend predictability.
Major shareholder Oh Se-young holds 40.27%; minority shareholders 59.73%. One share one vote principle applied.
Main subsidiary Auto World (KOLAO Developing) accounts for 61.7% of consolidated revenue and 78.08% of total assets, focusing on Southeast Asian auto markets (Laos, Vietnam, etc.).
Board consists of 3 inside directors and 2 outside directors. Full-time auditor is Park Joon-hyun. External auditor changed to Samjong KPMG from FY2026.
[AI Summary]Despite strong 2025 performance, LVMC faces investment risks from potential dilution due to the KRW 30B convertible bond and persistent governance deficiencies. Lack of shareholder return policies (dividends, buybacks) raises concerns about long-term shareholder value. Short-term price supported by earnings, but future funding needs and governance improvement pace are key variables.