대동 DAEDONG

-. Daedong, the largest shareholder, will participate in the paid-in capital increase as part of its commitment to responsible management, enabling Daedong Metals to raise KRW 9 billion and reinforce its listing stability.

-. Greater stability at Daedong Metals will help stabilize the supply chain for Daedong’s cast engine components, supporting the competitiveness of its agricultural machinery business.

-. The addition of a hydraulics business alongside high-value-added castings and advanced materials for robots will support a “value-up” target of KRW 240 billion in revenue by 2030.

 

Daedong Metals is diversifying its business by acquiring Hydrotech, a hydraulic components and systems company.

 

Daedong Metals (CEO Lee Pung-woo), a specialist in high-value-added cast components, announced on August 12, 2026, that its board had approved a paid-in capital increase of approximately KRW 9 billion through a third-party allotment at a meeting that day. The company will also acquire a 94.7% stake in Hydrotech (CEO Kim Sang-il), a wholly owned subsidiary of Daedong, for approximately KRW 9 billion. Amid growing capital market volatility, the transaction is intended to reinforce the company’s capital base and incorporate a revenue-generating business to improve its listing stability, while expanding its casting-focused business into hydraulic components and systems.

 

Under the acquisition structure, Daedong Metals will raise capital through the participation of its largest shareholder, Daedong, in a paid-in capital increase via a third-party allotment, and use the proceeds to acquire Hydrotech shares held by Daedong. Daedong is participating in the capital increase as part of its commitment to responsible management, supporting Daedong Metals’ listing stability and strengthening its medium- to long-term business foundation. The 3,000,000 new Daedong Metals shares to be acquired by Daedong are scheduled to be listed on September 17, 2026, and will be subject to a one-year lock-up. As this is a related-party transaction, an independent accounting firm valued Hydrotech to ensure the objectivity and fairness of the transaction price.

 

For Daedong, the continuity of Daedong Metals’ operations is also directly linked to its competitiveness in agricultural machinery production. Daedong Metals supplies key cast components used in Daedong engines. Any disruption to this supply base could require additional time and costs to develop and certify replacement components and transition production. By participating in the capital increase, Daedong intends to improve the stability of Daedong Metals’ listing and operations to maintain a stable supply of cast engine components and reduce the risks associated with supply chain transitions and production disruptions.

 

Through the acquisition, Daedong Metals will add hydraulic components and systems as a new business pillar alongside its existing casting materials and components business. Hydrotech has an established demand base linked to Daedong’s agricultural machinery business, providing a relatively predictable revenue base. Daedong Metals also plans to leverage its industrial equipment customer base and Hydrotech’s product portfolio to identify external customers and new product opportunities. These efforts will diversify its portfolio around two business pillars—casting and hydraulic components and systems—and strengthen its foundation for medium- to long-term growth.

 

 

Founded in 2007, Hydrotech develops and manufactures hydraulic components and systems used in agricultural machinery, industrial equipment and other applications. It currently supplies hydraulic components for Daedong’s tractors, combine harvesters and rice transplanters, and has expanded its business to agricultural and industrial machinery manufacturers in Korea and overseas. It recorded average annual revenue in the KRW 20 billion range over the past three years, from 2023 to 2025.

 

In addition to hydraulic components, Hydrotech has expertise in designing and developing hydrostatic transmission (HST) units, which transmit power and control speed in agricultural machinery, as well as hydraulic systems. Its product range currently extends from manually controlled HSTs to mechanical and electronic servo HSTs. Building on this portfolio, it is expanding from individual components into customized hydraulic systems. Over the medium to long term, it plans to develop its electrohydraulic systems business as a future growth driver by integrating electronic control technologies, including ECUs, sensors and CAN communication, into existing hydraulic systems. It also plans to extend applications beyond agricultural machinery to industrial machinery, robots and mobility.

 

The hydraulics market also has strong growth potential. According to market research firm Fortune Business Insights, the global hydraulics market is projected to grow from approximately USD 56 billion in 2025 to approximately USD 85.9 billion in 2034. Demand for construction and industrial equipment and increasing automation, together with the growing adoption of smart and electrohydraulic systems that combine conventional hydraulic equipment with sensors and electronic control technologies, are broadening the applications of related components and systems.

 

Meanwhile, Daedong Metals is pursuing five core strategies to achieve its 2030 targets: expanding orders for high-value-added castings; commercializing advanced materials for smart farms; commercializing advanced new-alloy materials for robots and mobility; expanding artificial intelligence transformation (AX) in manufacturing; and strengthening environmental, social and governance (ESG) management. It recently canceled all of its treasury shares, worth KRW 1 billion, to enhance shareholder value.