[Edaily Reporter KIM SAE-MI ] Amid changes in the domestic stock market environment, the calculations surrounding Alteogen Inc.(196170)’s potential transfer to the Korea Composite Stock Price Index (KOSPI) are becoming more complex. As expectations grow that the company will benefit from KOSDAQ policies, observers in the biotech industry are increasingly of the view that Alteogen Inc. may choose to remain on KOSDAQ to monitor market conditions before reconsidering a transfer at a later date, rather than rushing the move.

No Word on Preliminary Listing Review in First Half… Arguments for Remaining on KOSDAQ Gain Traction

Until early this year, Alteogen Inc. had set a goal of moving to the KOSPI within the year. Given this, it was expected that Alteogen Inc. would apply to the Korea Exchange for a preliminary listing review for the Main Board by the first half of this year at the latest.

What suggests a shift in direction is the fact that, as of mid-June (the 19th), there has been no news of Alteogen Inc. filing for a preliminary listing review. Consequently, market observers are speculating that Alteogen Inc. may be adjusting its timeline for the KOSPI transfer or considering the possibility of remaining on KOSDAQ.

Recently, views within the securities industry that emphasize the possibility of Alteogen Inc. remaining on KOSDAQ have been gaining traction. Following remarks by some analysts regarding this possibility, on the 19th, Eom Min-yong, an analyst at Shinhan Investment Securities, concluded in a report titled “Analysis of Scenarios for Alteogen Inc.’s Move to KOSPI” that remaining on KOSDAQ could be a reasonable choice.

Alteogen Inc.’s move to the KOSPI has long been a cherished goal for investors. This is because it was seen as an opportunity for the company to evolve from a leading biotech stock on the KOSDAQ into a representative biotech stock on the KOSPI. The move was expected to lead to inclusion in the KOSPI 200, expanded accessibility for institutional and foreign investors, an influx of passive funds, and an enhanced corporate profile. In particular, as results based on the “ALT-B4” platform—such as “Keytruda SC”—became more visible, a move to the KOSPI was viewed as an event that could lead to a revaluation of Alteogen Inc.’s corporate value.

Accordingly, PharmEdaily—Edaily’s premium pharmaceutical and biotech content platform—inquired with Alteogen Inc. on the 19th about the possibility of remaining on the KOSDAQ, but received the response that “nothing has been decided at this time.” A biotech industry insider noted, “Although Alteogen Inc.’s intentions are unclear, they are likely weighing the matter carefully internally,” adding, “Since moving to the KOSPI is not an urgent matter for Alteogen Inc., they may take their time to review the situation.”

The Dragon’s Waist or the Snake’s Head… Weighing the Pros and Cons

Farm Daily analyzed the pros and cons of Alteogen Inc. moving to the KOSPI versus remaining on the KOSDAQ and found that a move to the KOSPI had clear advantages in terms of symbolic significance and market supply and demand. On the other hand, remaining on KOSDAQ was advantageous in terms of maintaining the “blue-chip premium” and the potential to benefit from government policies. Ultimately, the analysis suggests that the key lies in determining which option offers greater practical benefits: “expanding the investor base through a move to the KOSPI” or “maintaining its status as a leading KOSDAQ stock.”

A biotech industry official noted, “Alteogen Inc.’s dilemma ultimately boils down to choosing between the dragon’s waist and the snake’s head,” adding, “Moving to the KOSPI would increase the company’s market presence, but its representativeness could be diluted among the ‘whales’; staying on the KOSDAQ, however, would allow it to maintain its blue-chip premium while potentially benefiting from government policies.”

The biggest advantage of moving to the KOSPI is the expectation of inclusion in the KOSPI 200 and the resulting inflow of passive funds. If Alteogen Inc. moves to the KOSPI, its chances of being included in major indices such as the KOSPI 200 and KOSPI 100 will increase, and it can expect an inflow of passive funds from ETFs, index funds, and pension funds. The fact that accessibility for institutional and foreign investors will expand is also a positive factor.

In addition, there is symbolic significance in a leading KOSDAQ biotech stock moving up to the main stock market. If Alteogen Inc. continues its earnings growth on the KOSPI, it can strengthen its status as a blue-chip stock representing the domestic biotech industry.

However, the possibility that the effects of the KOSPI transfer have already been largely factored into the stock price is a cause for concern. Some analysts suggest that the actual impact of passive fund flows may be limited relative to Alteogen Inc.’s market capitalization. Eom Min-yong, an analyst at Shinhan Investment Securities, stated, “The impact on supply and demand may be more limited than expected,” adding, “While a supply-and-demand fluctuation of approximately 1753억 won is anticipated upon the move to the KOSPI—which amounts to around 1% of Alteogen Inc.’s current market capitalization of 19조 won—this is too small to be considered a key determinant of the company’s value.”

Even if the company moves to the KOSPI, its overwhelming prominence on the KOSDAQ—which it has enjoyed—could be diluted given that market attention is currently focused on major sectors such as semiconductors, automobiles, and finance. Assuming Alteogen Inc.’s market capitalization remains around 20 trillion won, it is highly likely that its ranking on the KOSPI would fall within the 30th to 50th range. The increased pressure to prove its earnings performance following the move could also be a burden.

The biggest advantage of remaining on the KOSDAQ is the ability to maintain a premium as a leading KOSDAQ stock. Alteogen Inc. is regarded as a rare, mega-sized biotech platform company in the KOSDAQ market. It can maintain its status as a core component of existing indices, such as the KOSDAQ 150, and market attention is likely to remain focused on it as a representative growth stock on the KOSDAQ.

In addition, factors such as the National Growth Fund, the expansion of productive finance, policies to revitalize the KOSDAQ market, and discussions regarding the introduction of a KOSDAQ premium market are further strengthening the case for remaining on the KOSDAQ. If the KOSDAQ premium market is introduced, Alteogen Inc. could be cited as a leading beneficiary. The fact that the company can pursue a move to the KOSPI again once market conditions improve is another factor broadening its options.

On the other hand, if the company remains on the KOSDAQ, opportunities for inclusion in the KOSPI 200 and the inflow of passive investment funds from the KOSPI will inevitably be delayed. Since the proposal for a transfer to the KOSPI has already been approved, if the schedule is delayed without a clear explanation, the market may interpret this as a withdrawal of the transfer plan or a weakening of the momentum behind it.

It also remains uncertain whether policies aimed at revitalizing the KOSDAQ will actually lead to capital inflows. The high volatility characteristic of KOSDAQ biotech stocks and the continued dominance of retail investors in the market are also cited as limitations to remaining on the KOSDAQ.

All things considered, from Alteogen Inc.’s perspective, maintaining its status as a leading KOSDAQ stock while seeking an appropriate timing for the move may be a better choice than pushing for a KOSPI listing immediately.

A biotech industry official stated, “Given that market demand has recently been concentrated in certain sectors such as semiconductors, it is not a bad choice to remain a leading KOSDAQ stock and monitor the policy environment rather than rushing the move now.”