"Will we even see 2 million won, let alone 4 million?" one shareholder said.
Hyosung Heavy Industries, once a so-called "emperor stock" that nearly touched 5 million won per share, has plunged to the 1.6 million won range in just six months, leaving shareholders stunned. The decline has been steeper than those of Samsung Electronics and SK hynix.
The share price collapse has now been compounded by a fresh blow: the company's union has threatened a full strike.
On Friday, Hyosung Heavy Industries shares closed down 9.99 percent at 1.61 million won ($1,200). The stock has fallen more than 60 percent from a peak of around 4.85 million won.
Labor tensions have also flared. The company's office and technical workers' union warned Friday that it would launch a two-week general strike beginning Nov. 17 unless management presents a sincere, comprehensive proposal by next week. The union had already staged a 72-hour warning strike from Wednesday through Friday.
The union is demanding a 10 percent base salary increase, the establishment of a performance bonus standard and the elimination of welfare benefit disparities between job categories.
The union argues that despite Hyosung Heavy Industries posting consolidated operating profit of 747 billion won last year — a 106 percent increase from the previous year — the gains from improved earnings have not been adequately reflected in employee compensation.
Target price cuts have also been piling up. Most major brokerages — including Hyundai Motor Securities, Samsung, Hana, Shinhan Investment, Hanwha Investment, NH Investment & Securities, Mirae Asset, LS Securities and BNK Investment & Securities — have lowered their target prices for Hyosung Heavy Industries.
NH Investment & Securities cut its target price by 600,000 won to 3.4 million won from 4 million won. Hyundai Motor Securities lowered its target from 4.2 million won to 3 million won.
BNK Investment & Securities trimmed its target by 30.2 percent to 3 million won from 4.3 million won, saying it had applied a more conservative target price-to-earnings ratio to reflect uncertainty over US trade and monetary policy and declining valuations among global peers.
Hyosung Heavy Industries also missed market expectations in the third quarter. Consolidated sales came in at 1.74 trillion won, up 7.2 percent from a year earlier. Operating profit rose 10.8 percent to 243.5 billion won, but fell more than 20 percent short of the market consensus of 306.5 billion won.
Logistics disruptions that deferred revenue recognition and rising costs in the construction segment were cited as the main causes of the earnings shortfall.
park@heraldcorp.com
