The Korea Exchange announced on August 12 that it will designate 36 listed companies as administrative issues for trading below \u20a91,000 (approximately $0.71) per share\u2014commonly known as “penny stocks”\u2014or for failing to meet market capitalization thresholds. This marks the first application of strengthened delisting requirements that took effect on July 1.<\/p>\n
According to the exchange, 9 KOSPI-listed companies and 27 KOSDAQ-listed companies triggered administrative issue designation criteria. These stocks will be placed on the administrative issues list starting August 13. If they fail to resolve the triggering conditions for 45 consecutive trading days within the subsequent 90 trading days, they will be immediately delisted.<\/p>\n
On the KOSPI market, Daeyoung Packaging, Hyungji Elite, and Ilshin Stone were designated for maintaining share prices below \u20a91,000 for 30 consecutive trading days. Five companies\u2014SUN&L, Korea Electronics Holdings, Taewon Mulsan, Daewon Chemical, and Namsung\u2014triggered designation by falling below \u20a930 billion (approximately $21.2 million) in market capitalization for 30 consecutive trading days. Ontide was flagged for simultaneously failing both the share price and market cap requirements.<\/p>\n
On the KOSDAQ market, 21 companies triggered administrative issue designation for trading below \u20a91,000 per share, including Woori Enterprise, TK Chemical, CMG Pharmaceutical, Shaperon, Good People, JMI, SDN, Omnisystem, Inno Instrument, EastAid, Noul, S-Energy, LabGenomics, Newintech, and ABION. Among these, BK Holdings, i-Scream Edu, Wonpung Mulsan, Barunson E&A, Soosung Webtoon, and AFW had already been designated as administrative issues previously.<\/p>\n
Four KOSDAQ companies\u2014Kukil Shindong, Hantop, Fashion Platform, and S&W\u2014were designated for market capitalizations below \u20a920 billion (approximately $14.1 million). Hyungji Global and E8 were flagged for failing both share price and market cap criteria simultaneously.<\/p>\n
This round of administrative issue designations stems from financial authorities’ efforts to strengthen delisting requirements as part of addressing the “Korea Discount.” Under the revised listing rules, companies whose share prices remain below \u20a91,000 for 30 consecutive trading days or fall short of market capitalization thresholds are designated as administrative issues. If they fail to exceed the thresholds for 45 consecutive trading days within 90 trading days of designation, they face final delisting.<\/p>\n
Kang So-hyun, a senior research fellow at the Korea Capital Market Institute, explained: “Restrictions on penny stock listings have long been in place in the United States as well. When trading volume is thin and price volatility is high, the likelihood of manipulating share prices increases.”<\/p>\n
Concerns have also been raised that small and mid-sized companies whose share prices have fallen sharply due to recent market turbulence\u2014regardless of their earnings or financial health\u2014could suffer collateral damage. The Korea Federation of SMEs has called for supplementary measures to the criteria and a grace period for implementation.<\/p>\n
Some companies have staged dramatic recoveries ahead of the designation deadline. Mobidays, a KOSDAQ-listed company that issued a disclosure on August 5 warning of potential administrative issue designation, saw its share price rise 6.72% the previous day to close at \u20a91,000, averting the designation. Nine KOSDAQ companies\u2014including Davolink, Essentech, Nuvo, Lumens, and Cenotec\u2014also recovered above the \u20a91,000 threshold following their disclosures. On the KOSPI market, Daekyo and Sang Sang In Securities escaped penny stock status with 5 and 4 trading days to spare, respectively.<\/p>\n
Some companies have pursued share consolidations to avoid delisting. On the KOSPI market, three companies\u2014Younghwa Metal, Sajo DongA One, and Trinity Aviation\u2014are in the process of share consolidation, while seven KOSDAQ companies\u2014including Sewha P&C, Udeumji Farm, Cherrybro, and Ast\u2014are doing the same, with trading currently suspended. However, since additional consolidations or capital reductions are restricted within one year of a prior consolidation or reduction, critics note that consolidation alone may not be sufficient to escape the crisis.<\/p>\n
The newly designated stocks face immediate delisting if they fail to resolve the triggering conditions for 45 consecutive trading days within 90 trading days starting August 13. Accordingly, market observers project that mass delistings could materialize as early as October.<\/p>\n
Meanwhile, the KOSPI rose 3.6% on the day, with gains spread broadly across sectors including semiconductors. Samsung Electronics surged 6.6% and SK Hynix jumped 5.5%, while cosmetics stocks such as Kolmar Korea and Cosmax, along with Doosan Enerbility and Samsung Electro-Mechanics, also posted strong gains. During this year’s KOSPI rally, semiconductor concentration meant decliners outnumbered advancers, but this month, advancing stocks have outnumbered declining stocks on all but one trading day. Analysts note that market concentration is easing, with signs of sector rotation emerging.<\/p>\n","protected":false},"excerpt":{"rendered":"The Korea Exchange announced on August 12 that it will designate 36 listed companies as administrative issues for…\n","protected":false},"author":2,"featured_media":117845,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[457],"tags":[60738,60739,60740,23726,337,41611,864,60746,60745,60741,60744,60742,60743],"class_list":["post-117844","post","type-post","status-publish","format-standard","has-post-thumbnail","category-korea-exchange","tag-daeyoung-packaging","tag-hyungji-elite","tag-ilshin-stone","tag-korea-capital-market-institute","tag-korea-exchange","tag-korea-federation-of-smes","tag-krx","tag-labgenomics","tag-noul","tag-ontide","tag-shaperon","tag-sunl","tag-woori-enterprise"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/117844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=117844"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/117844\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/117845"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=117844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=117844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=117844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}