[Edaily Reporter KIM EUNG-TAE ] One month after the government tightened delisting requirements to weed out underperforming companies, and with the KOSDAQ market recently experiencing a sharp decline, the number of small and medium-sized enterprises (SMEs) and mid-sized companies facing the very real threat of delisting is skyrocketing. As the designation of “monitored stocks”—the stage preceding delisting—gains momentum, companies are embarking on efforts to improve their corporate value and are actively engaging with shareholders. Demand for consulting services from accounting firms and law firms to avoid the threat of delisting is also on the rise.

According to the Financial Supervisory Service on the 2nd, there were 28 disclosures in July alone regarding concerns over being designated as a “monitored stock” due to failing to meet the minimum market capitalization requirement. The companies that issued these warnings are all KOSDAQ-listed firms whose market capitalization has remained below 20 billion won for 25 consecutive trading days. KOSDAQ-listed companies whose market capitalization falls below 20 billion won for 30 consecutive trading days are designated as “monitored stocks.”
The sharp increase in announcements regarding the risk of being designated as a “monitored stock” in July is attributed to the sharp decline in the KOSDAQ market, as well as the government’s decision to tighten delisting requirements in order to swiftly remove underperforming companies from the domestic stock market. Previously, companies listed on the KOSPI and KOSDAQ were designated as “monitored stocks” if their market capitalization remained below 20 billion won and 15 billion won, respectively, for 30 consecutive trading days; however, starting this year, the thresholds have been raised to 30 billion won for the KOSPI and 20 billion won for the KOSDAQ. If a company designated as a “monitored stock” fails to recover and maintain its market capitalization above the threshold for at least 45 consecutive trading days within 90 trading days of the designation, it will be delisted immediately.
For small and medium-sized enterprises (SMEs) facing the imminent threat of delisting, communicating with dissatisfied shareholders has emerged as an urgent priority. i-Scream Edu Co., Ltd.(289010), a smart learning education provider, has had a market capitalization below 20 billion won for 25 consecutive trading days as of the 27th; if it fails to meet the market capitalization requirement for five consecutive trading days by August 3, it will be designated as a “monitored stock.” As of July 31, the most recent trading day, the company’s market capitalization stood at 11.2 billion won, making designation as a “monitored stock” highly likely, and a sense of crisis is growing among shareholders.
i-Scream Edu Co., Ltd. cites declining sales due to a shrinking school-age population as the primary reason for its falling corporate value, but the company maintains that it will focus on improving profitability and restoring its corporate value. A company official stated, “We take the concerns of shareholders and the market regarding the potential designation as a ‘monitored stock’ due to failing to meet market capitalization requirements very seriously,” adding, “Rather than focusing on short-term stock price fluctuations, we will prioritize the fundamental recovery of corporate value through improvements in operating performance and financial structure.” The spokesperson added, “We recorded operating and net profits in the first quarter of this year, demonstrating the results of our efforts to streamline our cost structure,” and noted, “We plan to enhance our smart learning services for preschoolers and middle school students, strengthen the competitiveness of our content to increase member retention rates, and expand our support projects in the public sector.” i-Scream Edu Co., Ltd. turned a profit in the first quarter of this year, posting an operating profit of 900 million won, compared to an operating loss of 3.6 billion won in the first quarter of last year.
Companies already designated as “monitored stocks” have rolled up their sleeves to restore their market capitalization in order to avoid crossing the final threshold for delisting. OSP Co., Ltd(368970), a pet food specialist, was designated as a monitored stock on the 10th due to a market capitalization below 20 billion won, but immediately announced measures to enhance corporate value and began taking action. On July 7 and 13, the company implemented measures to expand its market capitalization by paying in funds totaling 4.7 billion won raised through a rights offering. Starting July 9, it also began a 20 billion won share buyback program. Thanks to these efforts, as of the 31st of last month, the company’s market capitalization stood at 22.7 billion won, placing it above the delisting threshold.
OSP Co., Ltd has stated its commitment to continuing efforts to improve corporate value and expand its business. A company official said, “Our premium pet food business is showing robust growth,” adding, “Starting in the second half of this year, we will begin full-scale expansion into global markets, including the launch of an online store dedicated to the Chilean market.”
As the number of small and medium-sized enterprises (SMEs) and mid-sized companies facing the threat of delisting increases, the consulting market targeting these firms is also expanding. Demand for advisory services is growing across a wide range of areas—from monitoring and devising alternatives to maintain listing status, primarily provided by accounting firms and law firms, to support in handling legal disputes in the event of delisting. Starting next year, the delisting thresholds for failing to meet market capitalization requirements will be raised to 50 billion won for the KOSPI and 30 billion won for the KOSDAQ, and demand for advisory services to prevent delisting is expected to grow even further. An official from the accounting industry stated, “As delisting requirements become stricter, the number of listed companies struggling to maintain their listings will increase,” adding, “The consulting market, which provides professional support to proactively address delisting risks, will continue to expand.”