Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Morgan Stanley profits from soaring mask sales
People buy face masks at a shop in Seoul in this Jan. 28 file photo. / AP-Yonhap
By Park Jae-hyuk
By Park Jae-hyuk
Morgan Stanley Private Equity (MSPE) lives up to the Albert Einstein quote, “In the midst of every crisis, lies great opportunity.”
While the spread of 2019-nCoV has been affecting various industries, the private equity arm of the U.S. investment bank made a 12.4 billion won ($10 million) gain from its previous investment in a face mask manufacturer.
According to its regulatory filing, Tuesday, MSPE sold 14.9 million of its shares in Monalisa, Feb. 3, and another 24.4 million shares the following day.
The private equity firm's (PEF) stakes were sold for 8,812 won per share on Feb. 3 and 5,799 won per share the next day.
As a result, MSPE turned over 27.3 billion won in cash.
Considering it purchased Monalisa shares for 3,785 won per share in 2013, when it became the tissue maker's largest shareholder, the foreign PEF is assumed to have earned 12.4 billion won through the latest deal.
Monalisa has been regarded as a beneficiary of the recent epidemic, because it produces face masks and their raw materials.
Korea, like other countries, has seen soaring demand for face masks following the fear of virus.
Against this backdrop, shares of Monalisa ― priced at around 3,000 won in mid-January ― skyrocketed to 9,790 won on Feb. 3.
Due to the rising stock price, the Korea Exchange has even warned about investments in Monalisa.
MSPE capitalized on this fever and became one of few beneficiaries of the recent crisis.
Immediately after the largest shareholder unloaded a significant amount of shares, the Monalisa share dropped to 6,520 won, and it has remained at around 5,000 won recently.
MSPE's stake in Monalisa decreased to 55.21 percent from 66 percent.
Some capital market observers expect MSPE will make aggressive attempts to exit its investment in Monalisa, based on the recent popularity of face mask makers.
In 2019, Monalisa posted 2.8 billion won in operating profit.
Sales stood at 118 billion won, up 4.4 percent from a year earlier.