[Edaily Reporter kyoungeun kim ] Just one week after stricter delisting criteria took effect, six KOSDAQ-listed companies are on the verge of being designated as “monitored stocks” due to falling short of the market capitalization threshold. Unlike the “penny stock” requirements, which can be circumvented through stock consolidation, the market capitalization criteria offer no clear means of avoidance, making these companies the first to be targeted.
According to the Korea Exchange on the 7th, six KOSDAQ-listed companies issued delisting risk announcements from the 1st to the 6th due to a market capitalization below 20 billion won: SILLA SG CO., LTD.(025870)(1st), KMPHARMACEUTICAL Co.,Ltd.(225430)(1st), OSP Co., Ltd(368970)(2nd), Gold&S(035290)(3rd), Soosung Webtoon(084180)(3rd), and WELKEEPS HITECH(043590)(6th).

Under the “Four Major Strengthened Delisting Criteria” announced by the government in February of this year, a company will be designated as a “monitored stock” if its market capitalization for common stock remains below 20 billion won for 30 consecutive trading days. Most of these companies have already been below the market capitalization threshold for around 20 trading days, putting them on the verge of being designated as monitored stocks within the next few days.
If, following designation as a “monitored stock,” a company fails to meet the market capitalization threshold for 45 consecutive trading days out of 90, it will be delisted immediately. As of today, the market capitalizations of these companies are as follows: SILLA SG CO., LTD. at 8.2 billion won, KMPHARMACEUTICAL Co.,Ltd. at 8.9 billion won, OSP Co., Ltd. at 12.1 billion won, Gold&S at 9.5 billion won, Soosung Webtoon at 8.1 billion won, and WELKEEPS HITECH at 11.7 billion won—all significantly below the delisting threshold.
This is a concentrated wave of activity occurring in the first week since the strengthened delisting criteria took full effect; unlike the criteria for penny stocks, the market capitalization-based rules—which block even workarounds such as stock consolidations—are the first to bear the brunt of the stricter regulations aimed at maintaining listing standards.
Starting on the 1st of this month, companies on KOSDAQ with a market capitalization below 20 billion won and those on KOSPI below 30 billion won are subject to delisting review; in January of next year, these thresholds will be raised further to 30 billion won and 50 billion won, respectively.
Similarly to the market capitalization criteria, penny stocks will be designated as “under observation” starting on the 1st of this month if their share price remains below 1,000 won for 30 consecutive trading days; however, to avoid this requirement, listed companies are rushing to implement par value and stock consolidations. Since the start of this year alone, there have been approximately 240 stock and par value consolidations; notably, in June—just one month before the new regulations took effect—41 companies decided to consolidate their shares. This represents a significant increase compared to the same period last year, when there was only one such case.
With trading suspensions and other follow-up procedures resulting from stock consolidation decisions continuing, these companies are seen as attempting to revive their fortunes. However, experts generally agree that, given the difficulty of fundamentally improving their business fundamentals in the short term, stock consolidation merely to avoid delisting is nothing more than a “short-term fix” that only creates a stigma.
The number of announcements regarding concerns over being designated as “monitored stocks”—a step toward delisting—is expected to increase further. As of today, 160 KOSDAQ-listed companies are trading as “penny stocks” at less than 1,000 won, and 56 have a market capitalization below 20 billion won. Among KOSPI-listed companies, 41 are trading as “penny stocks” at less than 1,000 won, while 41 others have a market capitalization below 30 billion won.
Kang Jin-hyuk, an analyst at Shinhan Investment Securities, said, “As the exit of underperforming companies gains momentum due to stricter delisting requirements, positive changes are expected in terms of improving market fundamentals and enhancing confidence.” However, he added, “Since expectations of share price manipulation to avoid delisting are being factored in, increased volatility centered on related stocks may be inevitable in the short term.”