Once known as the 'people's chair,' DuoBack, a leader in the ergonomic chair market, is at risk of being delisted. The company has been designated as a cautionary investment due to five consecutive years of operating losses and has now been classified as a management issue after failing to meet market capitalization requirements.
On July 10, the Korea Exchange reported that DuoBack's stock closed at 663 won, up 7 won (1.07%) from the previous trading day. After closing at 946 won on June 18, the stock has struggled to recover and has fallen to penny stock status. A year ago, the stock was trading in the 2,000 won range but dropped to the 1,000 won range in September 2022 and has continued to decline. Over the past year, the stock has seen a decrease of 72.2%, with its market capitalization shrinking from approximately 26 billion won to 7.9 billion won, a 69.6% drop.
Founded in 1987, DuoBack has grown into a leading chair manufacturer in South Korea, specializing in ergonomic designs. The company went public on the KOSDAQ in 2004, gaining recognition for its chairs tailored to the Korean physique. However, prolonged poor performance has increased management pressures.
DuoBack's primary challenge is improving its financial performance. The company has recorded operating losses for five consecutive years from 2021 to 2025. According to the Financial Supervisory Service's electronic disclosure system, the operating losses were approximately 3.2 billion won in 2021, 4.2 billion won in 2022, 3.9 billion won in 2023, 3.4 billion won in 2024, and 3 billion won in 2025. As a result, the exchange designated DuoBack as a cautionary investment on March 18 due to these ongoing losses.
The market capitalization issue has also hindered the company. On June 10, DuoBack's market cap fell below 15 billion won for 25 consecutive trading days, prompting a warning regarding management designation. This change follows an increase in the market cap requirement for maintaining a KOSDAQ listing from 4 billion won to 15 billion won this year.
Although buying interest briefly pushed the stock price up from 916 won to 1,252 won over five trading days, the market cap remained at 14.9 billion won, failing to meet the new threshold. Consequently, the company was designated as a management issue after the market closed on June 17.
The ongoing losses have also impacted the company's financial structure. As deficits continued, the retained earnings turned into a deficit of 3 billion won by the end of last year. However, DuoBack conducted a revaluation of its real estate assets, including land, in September, reflecting a revaluation surplus of 33.4 billion won in its financial statements.
In response to growing concerns about delisting, DuoBack has taken action. Following its designation as a cautionary investment, CEO Jeong Gwang-young purchased shares in the open market. From March 17 to 19, he acquired a total of 60,710 shares, increasing his holdings from 4,228,616 shares (35.33% ownership) to 4,289,326 shares (35.84%).
On June 22, he posted a letter to shareholders on the company's website, outlining the situation regarding performance improvement and future plans. Jeong stated, "We are not avoiding external environmental changes but are facing them with a clear perspective," while emphasizing that the first quarter of 2026 shows signs of a turnaround. He noted that revenue grew by 15.5% from 5.42 billion won to 6.26 billion won compared to the same period last year, and the gross profit margin improved from 21.1% to 30.9%. As a result, the operating loss decreased from 765 million won to 234 million won, a reduction of about 70% year-over-year.
Additionally, to escape management designation, the company plans to focus on profitability, enhance financial stability through asset utilization, improve shareholder value using treasury shares, and expand transparent communication.
However, the outlook for alleviating delisting concerns remains challenging. Starting this month, the market cap threshold for potential delisting on the KOSDAQ has increased from 15 billion won to 20 billion won, with plans to raise it to 30 billion won next year. Furthermore, penny stocks are now subject to delisting reviews, indicating that DuoBack will continue to face significant pressure to maintain its listing.
* This article has been translated by AI.
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