[비즈한국] Diagnostic kit specialist Humasis205470 is facing a double whammy: the plummeting corporate value of its subsidiary, Billions053620, and tax evasion allegations involving its affiliate, Fantagio032800. As the COVID-19 boom has vanished, the competitiveness of its core diagnostic device business has eroded, and the emergence of affiliate risks threatens to shake the reserves that were built up during the pandemic.
On the 2nd, Billions adjusted the conversion price of its 6th series convertible bonds (CB) from 304 won to 273 won. The initial conversion price of the 10 billion won CB, issued in February 2023 for operating funds and acquisition of securities of other companies, was 1,534 won. However, as the stock price continued to fall, the conversion price was adjusted (refixed) more than 30 times, eventually shrinking to one-fifth of its original value.
Humasis acquired Billions in June 2024 for 48 billion won. Controversy over overvaluation was raised from the time of the acquisition, as the company was valued at 3,480 won per share when Billions' stock price was fluctuating in the 800-won range. Humasis has had to bear the full weight of Billions' decline in value. In its quarterly report, Humasis evaluates the book value of Billions at no more than 8 billion won. In effect, it has suffered a stake loss of over 40 billion won in just about a year since the acquisition.
Chairman Namkoong Gyeon stated that he highly valued the potential of Kyungnam Pharm053950, which is a subsidiary of Billions, but as Kyungnam Pharm's stock price, which was in the 1,000–1,100 won range at the time, is now barely maintaining the 620-won level, that reasoning has lost its persuasiveness.
The situation at the affiliate Fantagio is even more complex. The 4th Bureau of Investigation of the Seoul Regional Tax Office recently notified its affiliated actor Cha Eun-woo of a tax penalty in the 20 billion won range for income tax, and also imposed an 8.2 billion won penalty on Fantagio itself. Furthermore, allegations of tax evasion through a one-person corporate entity have been raised against actor Kim Seon-ho, shaking the brand value of Fantagio. On the 22nd of last month, when this news broke, Fantagio's stock price was 482 won, but it closed at 401 won on the 2nd, a decline of 16.8%.
In an official statement, Fantagio said, "We are currently in the process of confirming the facts in accordance with the procedures of the tax authorities, and both the agency and the artists are faithfully cooperating with the investigation within the necessary scope," adding, "Once legal and administrative judgments are clarified in the future, we will responsibly implement necessary measures based on those results." However, the market's reaction remains cold.
While Billions and Fantagio have no direct equity relationship, Billions' office is located on the 3rd floor of the Fantagio Building in Samseong-dong, Gangnam-gu, Seoul, and they share infrastructure, effectively making them an economic community. For Humasis, this means it is burdened with both the insolvency of its subsidiary Billions and the risks associated with its affiliate Fantagio.
During the COVID-19 pandemic, Humasis generated over 400 billion won in annual revenue and over 200 billion won in operating profit through its rapid diagnostic kits. With record-breaking performances such as 321.8 billion won in revenue and 193.6 billion won in operating profit in 2021, and 471.3 billion won in revenue and 214.7 billion won in operating profit in 2022, it had accumulated 334 billion won in retained earnings by the end of 2022.
However, since its largest shareholder changed to Chairman Namkoong Gyeon's Artist Cosmetics in January 2023, Humasis has been assessed as losing its identity as a diagnostic device company. The number of R&D personnel, which reached 35 in 2022, fell to 7 in the third quarter of last year, and R&D expenditures, which exceeded 5.2 billion won, barely exceeded 500 million won. As of the third quarter of last year, out of 23.7 billion won in revenue, revenue from its core diagnostic device business was a mere 3.5 billion won, accounting for less than 15%.
The lithium mine excavation project in Zimbabwe, which was ambitiously launched as a new growth engine, also faced a setback due to the local government's announcement of an export ban in June last year, leaving both its core and new businesses in a difficult situation.
On this day, Humasis's stock price started the morning 28 won (2.8%) higher than the previous day, but as of 3:05 PM, it is trading at 997 won, down 5 won (0.5%).