The blue-chip corporate department, known for its consistent growth, faced a decline for the first time due to plummeting sales and net profits among small KOSDAQ listed companies. This segment comprises firms meeting specific financial and size criteria, with many failing to meet crucial benchmarks like return on equity and net profit.
According to the Korea Exchange, 130 out of 526 companies in the blue-chip category, including Ecopro and Kakao Games, were demoted in the recent KOSDAQ market review. Initially launched with 197 companies, the blue-chip department had seen a steady increase in its roster, reaching 500 companies before experiencing a net reduction of 62 this year.
This decline is significant given the overall rise in the number of KOSDAQ listed companies, which grew from 1,722 to 1,793 in the past year. Of the 130 demoted companies, 118 failed to meet financial requirements, such as a minimum return on equity or net income over a specified period.
The Korea Exchange revamped the corporate structure within the KOSDAQ market, promoting or demoting listed companies based on various criteria. Concerns loom over the deteriorating financial health of KOSDAQ listed companies, particularly small and medium-sized enterprises.
Chung Yong-taek from IBK Investment & Securities highlighted the declining profitability of these companies, attributing it to increasing bankruptcy risks and changing loan dynamics. However, companies recognized by the Ministry of Technology and Growth showed strong performance this year.
Unlike previous years, where specially listed companies rarely achieved top-tier status, this year saw six technology growth firms promoted to the blue-chip category. Stocks affiliated with the Ministry of Technology and Growth witnessed substantial gains, outperforming the broader market indices.
Some standout performers in the KOSDAQ market include Alteogen, Peptron, ABL Bio, Olyx, Rainbow Robotics, and Clobot, reflecting the growing influence of pharmaceutical, biotech, and robotics sectors. These companies saw remarkable stock price surges compared to the overall blue-chip corporate sector.
Despite challenges faced by small and medium-sized enterprises, the success of technology-driven firms underscores evolving market dynamics and the shift towards high-growth sectors. The KOSDAQ market continues to witness transformations, with implications for investors and industry stakeholders alike.
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