[BizHanKook] Youngone Corporation is set to cancel 78.8 billion won worth of treasury shares, representing approximately 2.5% of its total issued shares. By eliminating over 60% of its existing treasury shares while simultaneously committing to purchase an additional 50 billion won worth of stock, the company is accelerating its shareholder return initiatives.
Cancellation of 1.08 Million Shares Out of 1.75 Million Existing Treasury Shares
Youngone Corporation will cancel 1,086,684 treasury shares on November 20. The scheduled cancellation amount is approximately 78.8 billion won (78.78 billion won), accounting for roughly 2.45% of the 44,311,468 currently issued shares.
Youngone Corporation currently holds a total of 1,751,356 treasury shares. This total consists of 289 fractional shares acquired during the company split in 2009, 445,118 shares purchased in 2016, and 1,305,949 shares acquired between 2024 and 2025 at a cost of approximately 50 billion won. After this cancellation, the remaining treasury shares will total 664,672, and the total number of issued shares will decrease to 43,224,784.
Consequently, the stake of the largest shareholder, Youngone Holdings, relative to the total issued shares will increase from 50.52% to approximately 51.79%. However, since treasury shares generally do not carry voting rights, this cancellation alone does not automatically increase the controlling shareholder's voting power.
Youngone Corporation's treasury share policy offers a point of comparison to how other companies have responded since the implementation of the revised Commercial Act. Under the revised law enacted in March of this year, treasury shares newly acquired by a company must, in principle, be cancelled within one year. Existing treasury shares held before the law took effect are also generally expected to be addressed within a certain period. However, companies can utilize these shares if they establish a holding or disposal plan for employee compensation or management purposes, subject to approval at a general shareholders' meeting.
Some large corporations, such as Samsung Electronics, are utilizing these exceptions to use treasury shares as performance-based bonuses or long-term incentive rewards. This approach aligns the interests of employees and shareholders instead of simply eliminating the stock.
In contrast, Youngone Corporation has not shown a significant trend of actively using treasury shares for employee stock-based compensation. The company’s compensation system remains heavily cash-oriented. Recent filings indicate that while significant cash bonuses were paid to key executives, there was no mention of stock-based compensation.
It is not as if financial constraints prevent the choice of stock-based compensation. In the first half of this year, Youngone Corporation recorded consolidated revenue of approximately 2.1275 trillion won and an operating profit of approximately 296 billion won. At the end of the first half, its cash and cash equivalents stood at approximately 720 billion won. Therefore, based on publicly available data, it is more accurate to view the company’s treasury share strategy as prioritizing shareholder returns over employee compensation.
Youngone Corporation is not only eliminating existing treasury shares but also actively purchasing new ones. On October 6, the company signed a 50 billion won treasury share acquisition trust agreement with Shinhan Investment Corp., effective until April 6, 2027. The acquired shares are intended to be used for enhancing shareholder value, including future cancellations.
Under the revised Commercial Act, newly acquired treasury shares are, in principle, subject to cancellation within one year. If Youngone Corporation intends to use these new acquisitions for other purposes, such as employee compensation, it would require separate holding or disposal procedures.
In its corporate value enhancement plan released last August, Youngone Corporation announced it would raise its dividend payout ratio target from 25% to 30% and purchase an additional 50 billion won in treasury shares by 2027. The total dividend amount, combining the 2025 fiscal year-end dividend and this year's interim dividend, reached 104.3 billion won, a 16.3% increase from the previous year.
Holding Company Also Cancels 9.5% of Shares This Year… Enhanced Shareholder Returns Under Sung Rae-eun
The holding company, Youngone Holdings, is also actively cancelling treasury shares. Youngone Holdings cancelled 545,420 shares in May and 712,460 shares in October of this year. The total of 1,257,880 shares represents 9.5% of its issued shares, valued at approximately 227.1 billion won. This amount significantly exceeds the company's initial plan to cancel 1% of issued shares annually from 2025 to 2029.
The group’s governance structure follows the path: "Sung Rae-eun → YMSA → Youngone Holdings → Youngone Corporation." YMSA is the largest shareholder of Youngone Holdings with a 29.39% stake, and Vice Chair Sung Rae-eun holds a 50.10% stake in YMSA.
Since Vice Chair Sung took the helm of the group, both Youngone Holdings and Youngone Corporation have consistently moved toward increasing dividends and enhancing treasury share purchases and cancellations. However, there is no evidence to conclude that these cancellations are aimed at expanding the owner family's control. Furthermore, the cancellation of existing treasury shares does not change the voting power stake.
What is more noteworthy is that while the revised Commercial Act provides companies with options like treasury share cancellation and employee incentives, the Youngone Group is currently opting heavily for cancellation and shareholder returns. Even after this cancellation, Youngone Corporation still holds 664,672 existing treasury shares and is pursuing a new 50 billion won acquisition. The next focus of attention will be on how the company handles these remaining and newly acquired shares.