At a shareholders’ meeting on the morning of Mar. 31 at the headquarters of Kumyang, a secondary battery company based in Busan’s Sasang-gu, Chairman Ryu Kwang-ji read a letter of apology, pledging to make every effort to rescue the company as concerns mount over a possible delisting.
Kumyang, once the world’s leading producer of chemical blowing agents, pivoted to the secondary battery industry in an attempt to reinvent itself. The strategic shift briefly transformed the company into one of the market’s most prominent theme stocks, with its market capitalization surging from the 200 billion-won range ($135 million) in 2021 to more than 10 trillion won ($6.7 billion) at its peak in 2023. At one point, its valuation surpassed major companies such as SK Telecom and Woori Financial Group.
Despite its aggressive push into the battery sector—encompassing plans for next-generation cylindrical batteries and mineral resource projects in the Democratic Republic of Congo and Mongolia—the company has posted virtually no revenue from battery-related operations. Investor skepticism has continued to grow, with critics raising doubts about the company’s technological capabilities and the legitimacy of its initiatives.
On Mar. 21, trading of Kumyang’s shares was suspended after an external auditor issued a disclaimer of opinion, citing uncertainty about the company’s ability to remain a going concern. A disclaimer of opinion is grounds for delisting. The suspension came just two weeks after the company promoted its battery technology with a large-scale booth at InterBattery, a major industry exhibition.
A review of the company’s business reports from 2019, when it launched its battery venture, through 2023 reveals a widening gap between its public announcements and actual performance.
Founded 70 years ago, Kumyang built its name as a mid-sized chemical manufacturer based in Busan, once leading the global market in blowing agents used in shoe insoles, flooring, and other materials. However, it faced stagnation in its core business, with operating profit margins typically in the 3 to 5 percent range.
In 2019, the company entered the battery market, citing similarities between its blowing agent production process and the lithium hydroxide refining process used in battery manufacturing. Though a late entrant, Kumyang quickly became a retail investor favorite, with its stock price climbing from the 4,000–5,000 won range to nearly 190,000 won at its peak.
Over the following years, the company rolled out a series of ambitious plans. According to its filings, Kumyang began pursuing lithium hydroxide production in 2020, launched a hydrogen fuel cell project in 2021, and in 2022 announced an investment plan for a mine in the Democratic Republic of Congo.
“As shareholder expectations soared, many in the industry questioned whether the company was rushing into initiatives without adequate preparation,” said one battery industry official. “Its business plans seemed disproportionate to its actual size and technical resources.”
In May 2023, Kumyang signed a memorandum of understanding to acquire a 60 percent stake in a Mongolian mining firm for $60 million (approximately 80 billion won at the time). Quoting data from the local partner, the company claimed the mine contained mineral deposits valued at 118 trillion won ($80 billion), including 70 trillion won in lithium and 22 trillion won in tungsten. Kumyang projected 2024 sales of 402.4 billion won ($272 million) and operating profit of 161 billion won ($120 million) from the mine. It also announced plans to invest 610 billion won ($460 million) to build a cylindrical battery manufacturing plant in Gijang, Busan, targeting mass production in 2024.
The announcements further fueled investor enthusiasm, bolstered by the company’s former PR director Park Soon-hyuk, who gained attention on YouTube under the nickname “Battery Uncle” and promoted Kumyang’s battery ventures to retail investors.
However, the company’s initiatives have increasingly come under fire for lacking transparency and credibility. In a revised disclosure issued in September 2023, Kumyang slashed its 2024 sales forecast for the Mongolian mine from 402.4 billion won to 6.6 billion won ($4.5 million), and its projected operating profit from 161 billion won to 1.3 billion won ($880,000)—just 1.6 percent and 0.8 percent, respectively, of its original guidance. The company was later designated as an entity with inadequate disclosures.
The Gijang battery plant, which Kumyang had previously touted as being ahead of Tesla’s cylindrical battery operations, has been delayed due to unpaid construction costs. As of the end of last year, the company had just 43 battery researchers and held five battery-related patents.
Next-generation cylindrical batteries for electric vehicles remain a technical hurdle even for South Korea’s top three battery manufacturers, all of which operate with thousands of researchers and tens of thousands of patents. “The battery sector attracted widespread attention during its rapid expansion, but many companies launched overly ambitious projects and made speculative investments that lacked proper vetting,” said an industry insider.
