"Where Is the KRW 1 Trillion Value-Up Plan Headed?" DIO Shareholder Activism Gains Momentum as Stake Reaches 9% [fn Market Watch]

[Financial News]  Minority shareholders of KOSDAQ-listed DIO have consolidated an approximately 9% stake, putting H-PE's "KRW 1 trillion value-up" initiative to the test. They are moving beyond simply seeking to boost the stock price and are demanding that the company fulfill the plans to enhance corporate value and return capital to shareholders that were presented when H-PE invested in 2024.
According to investment banking industry sources on the 2nd, DIO's minority shareholder coalition has consolidated approximately 9% of the company's total shares outstanding through the shareholder activism platform Act and formally demanded measures to enhance shareholder value. Depending on the company's response, it will also consider requesting a special shareholders' meeting.
What the shareholders are taking issue with is the gap between the company's earnings recovery following H-PE's investment and its stock price.
H-PE invested KRW 70 billion in DIO in 2024 and became involved in its management. At the time, the company presented plans, led by a new management team, to enhance corporate value and introduce shareholder return policies, with the goal of reaching a corporate value of KRW 1 trillion within three years.
DIO's earnings are showing signs of normalization. Its consolidated revenue for the first half of this year rose 13.7% year on year to KRW 86.3 billion. Operating profit increased 88.3% to KRW 8.5 billion, while net profit reached KRW 14.7 billion, marking a return to profitability.
The stock price, however, moved in the opposite direction. According to the shareholder coalition, DIO closed at KRW 9,430 on the 23rd of last month, down approximately 47% over the past year. The coalition has therefore demanded shareholder return measures, including share buybacks and cancellations and expanded dividends, along with a concrete roadmap to increase corporate value by 2027.
Lee Seok-min, head of DIO's minority shareholder coalition, stressed, "Although revenue and earnings are normalizing, the stock price is not reflecting this," adding, "Management must explain to the market how it plans to increase corporate value over the remaining period."
The approximately 9% stake consolidated by the shareholder coalition exceeds the minimum stake required to request a special shareholders' meeting. If it fails to obtain a concrete response through discussions with the company, the coalition plans to use minority shareholder rights to seek the meeting.
Investment banking industry sources viewed the case as an example of how a private equity firm's value-up strategy for a listed company is being evaluated at the capital allocation stage, beyond earnings improvement. Since earnings normalization alone is unlikely to prompt a market revaluation, capital policies involving dividends, treasury shares and growth investment are expected to be key factors going forward.
An investment banking industry source noted, "When a private equity firm becomes involved in managing a listed company, the key evaluation is ultimately how the value-up strategy presented at the time of investment translates into the stock price and shareholder returns," adding, "For DIO as well, the critical question is what capital policy it introduces after improving its earnings." 
DIO is a KOSDAQ-listed company specializing in dental implants and digital dentistry solutions. It operates in domestic and overseas markets based on its digital implant system, DIOnavi.
[email protected] Kim Kyung-ah Reporter