SEOUL -- Align Partners Capital Management Inc. (“Align Partners”), a shareholder of Coway Co., Ltd. (KRX: 021240) (“Coway” or the “Company”) owning 2.8%, has published a presentation calling for improvements in Coway’s governance and capital allocation.

Netmarble Corp. (“Netmarble”), with a 25.1% stake, wields disproportionate control over Coway. This influence is entrenched through its founder serving as Executive Chair, a former Netmarble executive as CEO, and a director nomination process overseen by Netmarble, raising serious governance concerns.

Coway’s governance structure, with obvious conflicts of interest, has failed to protect minority shareholders’ interests. This was starkly demonstrated when Coway’s Netmarble-influenced leadership slashed the shareholder return policy from 90% to 20%. Since then, accumulated earnings have not been effectively utilized, weighing down ROE and valuations. Coway’s rushed January 6th announcement to raise the shareholder return ratio to 40% risks lowering its already low leverage multiple (1.0x vs. industry 2.2x), further reducing ROE and valuations.

The market’s concerns are evident in Coway’s valuation decline, with its PBR falling from 6.0x on December 30th, 2019, when Netmarble became its largest shareholder, to 1.5x today. This sharp drop reflects eroded investor confidence and the urgent need for Coway to address governance shortcomings, optimize its capital structure, and limit Netmarble’s influence. Align Partners has specifically urged Coway to:

· Strengthen its governance by making its Board truly independent to ensure fair representation of minority shareholders’ interests against that of only Netmarble’s.
· Adopt a target capital structure policy, focused on maintaining an appropriate Net Debt to EBITDA multiple, which would enable an improved shareholder return policy.