Does a bonus issue increase a company's value?

No. A bonus issue (free capital increase) transfers reserves (mainly capital surplus) to capital stock by board resolution or similar means and distributes an equivalent number of new shares to shareholders; since no outside money comes in, total equity and corporate value remain substantively unchanged.

The Financial Supervisory Service notes that the share price may rise temporarily because of the illusion that the stock looks cheap after the ex-rights date, but it may fall back if there is no change in real value.