Why you should pay attention to Aprogen's biopharmaceutical development beyond its free stock split and trading suspension
Aprogen (007460) is a company that sells steel plates as its main business, and has Aprogen Pharmaceuticals, which operates a pharmaceutical business, and Aprogen Healthcare & Games, which operates a game business, as its subsidiaries. Recently, it has been focusing on biopharmaceutical development, and is trying to increase the value of the company through this. However, it is trying to reduce its capital and escape the crisis of being designated as a management stock by free stock split and trading suspension due to the deterioration of its financial structure. In this article, we will look at the schedule of Aprogen's free stock split and trading suspension, and the future stock price expectations.
## What is a free stock split?
A free stock split is a method of reducing the company's capital by reducing the number of shares issued by the company. For example, if you merge 3 common shares into 1 common share with the same face value, the number of shares you have will be reduced by 1/3. Of course, as the number of shares decreases, the price per share increases by 3 times. That is, if you had 300 shares worth 1,000 won each, after the split you would have 100 shares worth 3,000 won each.
The purpose of a free stock split is to improve the financial structure. If the company continues to incur operating losses and increase deficits, the deficits will be greater than the capital. This state is called capital erosion, and if the capital erosion ratio exceeds 50%, it may face the risk of being designated as a management stock or delisted. Therefore, the company tries to reduce its capital erosion ratio and improve its financial situation by reducing its capital through a free stock split.
## Schedule of Aprogen's free stock split and trading suspension
Aprogen announced a free stock split on November 15th last year. According to the announcement, it was decided to merge 3 common shares into 1 common share with the same face value. That is, the number of shares I have will be reduced by 1/3.
The schedule of Aprogen's split is as follows.
- November 29th: Split confirmed at shareholders' meeting
- December 28th ~ January 18th, 2023: Trading suspension for split work
- January 19th: Relisted with split number and price of shares
That is, after about 3 weeks of trading suspension period, trading will start again with the split number and price of shares.
## Status and prospects of Aprogen's biopharmaceutical development
Aprogen is investing a lot of effort and money in biopharmaceutical development as well as steel plate sales. Aprogen Pharmaceuticals currently has various pipelines, and among them, APZ-101, a blood cancer treatment drug, is attracting attention.
APZ-101 is being developed as a treatment for AML (acute myeloid leukemia) and MDS (myelodysplastic syndrome), which are intractable leukemias among blood cancers. APZ-101 is conducting clinical trials in Singapore, and signed a contract with Novotech, a clinical outsourcing agency, last April.