Bukwang Pharm Announces A Capital Raise of 100 Billion Won

• On 28 March, Bukwang Pharmaceutical (003000 KS) announced a capital raise of 100 billion won. Its share price fell by 13.3% today.

• The company plans to issue 30.2 million new shares (44% of outstanding shares). Expected rights offering price is 3,310 won (15.1% lower than current price).

• We are negative on Bukwang Pharm mainly due to excessive shareholding dilution from this rights offering as well as lack of valuation merits.