Duksan Hi-Metal's subsidiary Duksan Neochem listing case is drawing attention following the Korea Financial Supervisory Commission and Korea Exchange's release of dual-listing guidelines. The KOSDAQ-listed parent company Duksan Hi-Metal and IPO lead underwriter Daishin Securities addressed dual-listing concerns by securing approval from general shareholders of the parent company, and this process became a key element in the dual-listing guidelines. Ko Young-ho, Director of the FSC's Capital Market Division, stated that Duksan Hi-Metal "effectively complied with dual-listing guideline standards" by obtaining general shareholder consent during the Duksan Neochem listing process. The new guidelines aim to protect minority shareholders when listed parent companies pursue subsidiary listings.
Duksan Hi-Metal Secures 92% Shareholder Approval for Subsidiary Listing
Duksan Hi-Metal, a KOSDAQ-listed company, holds a 63.24% stake in Duksan Neochem as the largest shareholder. The company acquired Duksan Neochem in 2021 and incorporated it as a subsidiary. Duksan Neochem selected Daishin Securities as its IPO lead underwriter in late last year and filed for KOSDAQ listing preliminary review with the exchange in November.
Duksan Hi-Metal conducted a shareholder impact assessment for the subsidiary listing in early this year. After a third-party review of the assessment results, the company's board deliberated and approved the Duksan Neochem listing in May. During this process, Duksan Hi-Metal presented a shareholder persuasion plan arguing that dilution of the parent company's value would be minimal post-listing because Duksan Hi-Metal (semiconductor materials) and Duksan Neochem (defense and aerospace) operate in different industries.
Regarding shareholder protection measures, Duksan Hi-Metal committed to allocating 5% of the IPO shares to the parent company's general shareholders if Duksan Neochem lists. The company also promised to implement a mid- to long-term cash dividend policy and provide sufficient shareholder communication through investor relations activities.
Based on these measures, Duksan Hi-Metal held an extraordinary general meeting in May and put the Duksan Neochem listing approval agenda to a vote. The result showed approval from 92% of shares held by attending shareholders and 78% of total issued shares.
The dual-listing guidelines specify that when a parent company votes on a subsidiary listing resolution at a general meeting, voting rights exceeding a 3% stake must be capped at 3%, and the resolution must obtain majority approval from attending shares plus at least one-quarter of total issued shares.
Duksan Hi-Metal's general meeting occurred before the guideline announcement and thus did not apply the 3% rule, but it secured approval from general shareholders excluding the largest shareholder at a level exceeding special resolution requirements.
Daishin Securities Supports DTS Shareholder Approval Process
Duksan Hi-Metal's success in obtaining approval from its general shareholders for the Duksan Neochem listing brought attention to Daishin Securities. As the IPO lead underwriter for Duksan Neochem, Daishin Securities supported the practical work for Duksan Hi-Metal's shareholder impact assessment, shareholder protection measures, and general meeting preparation.
A Daishin Securities official stated, "When the dual-listing issue emerged early this year, we agreed with Duksan Hi-Metal to take a 'frontal breakthrough' approach. We jointly proceeded with preparing and persuading shareholders about Duksan Hi-Metal's general shareholder protection measures."
This experience also influenced Daishin Securities' work on another IPO client, DTS. DTS was acquired by KOSDAQ-listed Dasan Networks in 2013. The company selected Daishin Securities as lead underwriter in 2023 and filed for KOSDAQ listing preliminary review in September last year.
With Daishin Securities' practical support, Dasan Networks held five official shareholder meetings from last year through this year. During these meetings, the company stated it had worked to improve the management environment for over 10 years since acquiring DTS. Based on this, Dasan Networks emphasized that the DTS listing would help strengthen the parent company's financial soundness.
As a result, at Dasan Networks' extraordinary general meeting in June, the DTS listing agenda obtained approval from 90.33% of attending voting rights and 46.5% of total issued shares. This company also had its general meeting scheduled before the dual-listing guideline announcement and thus did not apply the "3% rule," but it satisfied the special resolution requirements of at least two-thirds of attending shareholder voting rights and at least one-third of total issued shares.
Dual-Listing Guidelines Impact Securities Firms' IPO Strategies
Daishin Securities' precedent in supporting parent company general shareholder consent for subsidiary listings is expected to serve as a reference for other securities firms. Since many domestic IPOs have consisted of subsidiaries of listed parent companies, securities firms handling future listing mandates will be strongly conscious of the dual-listing guidelines.
Large-scale IPOs exceeding 500 billion won in offering amount have generally been affiliate listings of major domestic conglomerates. HD Hyundai Marine Solution, the largest IPO of 2024, has listed HD Hyundai as its largest shareholder, and LG CNS, the 2025 leader in offering amount, has listed LG as its largest shareholder. Previous cases including Kakao Games, Kakao Bank, Kakao Pay, LG Energy Solution, and SK Bioscience followed the same pattern.
Securities firms' performance in IPO-related investment banking has been determined by how many of these large-scale IPO mandates they secure. For example, KB Securities ranked third among securities firms by lead underwriting amount in 2024 but rose to first place in 2025, with the LG CNS lead underwriting contributing to this result.
The dual-listing issue is already being absorbed into the securities firm IPO market. Korea Investment & Securities ranked first in IPO lead underwriting amount in 2024 but dropped to ninth place in 2025, partly due to the abandonment of listings by SK Enmove and Lotte Global Logistics - both subsidiaries of domestic listed companies for which the firm served as lead underwriter - because of dual-listing issues.
The Korea Exchange is expected to announce the Duksan Neochem listing preliminary review results as early as the third quarter.
FAQ
What approval did Duksan Hi-Metal obtain for the Duksan Neochem listing?
Duksan Hi-Metal held an extraordinary general meeting in May and obtained approval from 92% of shares held by attending shareholders and 78% of total issued shares for the Duksan Neochem listing agenda.
What role did Daishin Securities play in the Duksan Neochem listing process?
Daishin Securities served as the IPO lead underwriter for Duksan Neochem and supported the practical work for Duksan Hi-Metal's shareholder impact assessment, shareholder protection measures, and general meeting preparation to address dual-listing concerns.
