The Significance of Dong-A Socio Holdings’ 42.53% Stake: The Reality of Its Equity Alliances With GSK and Otsuka

The combined stake held by Kang Jung-seok, chairman of the committee and the largest shareholder of Dong-A Socio Holdings, and 33 specially related parties was reported at 42.53%. According to the Financial Supervisory Service’s electronic disclosure system, Chairman Kang holds 2,863,626 shares, down 412 shares, or 0.01 percentage points, from the 2,864,038 shares (42.54%) reported in the previous filing, as of March 31. The decrease was attributed to employee stock ownership deposits, executive departures and extensions of stock-backed loans.

Following his departure as an executive, Lim Ki-hong disposed of all 961 shares he held, while 16 executives, including Ko Young-eun and Yeo Kyun-hyun, acquired an additional 590 shares through employee stock ownership deposits. Although the change in ownership was minimal, the key point in this disclosure is not the figure itself but the nature of the ownership structure.

GSK and Otsuka: Key pillars of management-control defense

Chairman Kang directly holds a 29.26% stake, or 1,969,904 shares. Among the remaining specially related parties, Glaxo Group Limited (GSK) holds the largest stake, with 434,642 shares (6.46%). Otsuka Pharmaceutical follows with 263,626 shares (3.92%), while Korea Otsuka Pharmaceutical holds 108,522 shares (1.61%).

These three companies are joint holders that have entered into an agreement with Chairman Kang to exercise voting rights jointly. When Dong-A Pharmaceutical converted to a holding-company structure in 2013, GSK and Otsuka reportedly played a decisive role in establishing management control by voting in favor of the change despite opposition from the National Pension Service. As the agreement has remained in place, their stakes have functioned as key pillars of management-control defense, going beyond simple financial investments.

What the 22.96% pledged stake reveals about the funding structure

Chairman Kang has pledged a total of 1,545,462 shares (22.96%) to Hana Bank, Shinhan Bank, Eugene Investment & Securities and KB Bank, among others, as collateral for stock-backed loans. In this filing, the loan periods were extended, while the number and percentage of pledged shares remained unchanged from the previous filing.

The fact that 22.96% of his 29.26% personal stake is tied up as collateral with financial institutions reflects a method of securing personal liquidity while retaining voting rights, a common ownership-structure pattern among the families that control South Korea’s major conglomerates. However, the potential risk of forced liquidation if the share price falls warrants ongoing monitoring.

Dong-A Pharmaceutical merger and strategy to become a business holding company

Underlying these changes in the ownership structure is a major strategic shift at the group level. Dong-A Socio Holdings announced that it will absorb its wholly owned subsidiary Dong-A Pharmaceutical effective Oct. 1, 2026, and convert into a business holding company. The structure is intended to allow the holding company to directly control stable cash generation from over-the-counter drug businesses, including Bacchus.

As of the first quarter of 2026, Dong-A Socio Holdings’ revenue was approximately 351 billion won, up 6.9% from the same period a year earlier, while net income rose 15% to 20.6 billion won. The cash flow secured after the merger is expected to be invested in expanding ST Pharm’s oligonucleotide (raw materials for RNA therapeutics) CDMO plant and the global commercialization of Stelara biosimilar DMB-3115 by Biotigen.

Industry experts believe the equity alliance with GSK and Otsuka could serve as practical leverage in securing global distribution networks and pursuing joint R&D for new drugs and biosimilars, beyond acting as a defense against challenges to management control. The average analyst price target compiled by global financial information providers including MarketScreener is 145,000 won, representing an estimated 48%-55% upside from the current share price. This is why analysts say the stock has been slow to reflect the company’s three-year compound annual EPS growth of 38%.