[Edaily Reporter Kim Hyung-il ] With the tightening of KOSDAQ delisting criteria, there is growing speculation that companies with a market capitalization of less than 20 billion won may be delisted. However, it has come to light that some of these companies are actually profitable, generating both operating and net income. Controversy is expected to intensify over whether it is appropriate to determine a company’s continued listing solely based on market capitalization, regardless of its financial performance or business competitiveness.

According to the financial investment industry on the 25th, 45 of the 149 KOSDAQ-listed companies with a market capitalization of less than 20 billion won as of the end of last month were found to be profitable. Consequently, these companies argue that it is unreasonable to determine whether they should remain listed based solely on market capitalization. Critics point out that exposing companies to the risk of delisting solely because their stock prices and market capitalization are low—even though they are consistently generating profits from their core businesses and actively pursuing shareholder returns and strengthening business competitiveness—fails to properly reflect the companies’ actual value.

Last month, financial authorities raised the KOSDAQ market capitalization threshold from 15 billion won to 20 billion won. If a company’s market capitalization falls below the threshold for 30 consecutive trading days, it is designated as a “monitored stock”; if it fails to meet the threshold for at least 45 consecutive trading days out of the subsequent 90 trading days, it faces delisting. Starting next January, the threshold will be further raised to 30 billion won.

After screening companies with a market capitalization of less than 20 billion won but an operating profit margin of 5% or higher and positive operating profits, and further verifying their financial disclosures and individual circumstances, the following companies were identified: STARFLEX CO., LTD(115570),WAPS Co., Ltd.(196700), andFashion Platform Co.,Ltd.(225590). These companies were generating profits in their respective core businesses and were also continuing efforts to enhance corporate value through shareholder returns and business expansion.

STARFLEX CO., LTD manufactures advertising flex fabric—used for storefront signs, freestanding signs, banners, and large highway billboards—as well as safety nets to prevent falls at construction sites. The company supplies its products through an overseas sales network, with exports accounting for approximately 50% of total sales. In the first half of this year, on a consolidated basis, revenue reached 49.6 billion won, operating profit was 4.4 billion won, and the operating profit margin stood at 8.8%. Operating profit more than doubled compared to the same period last year. Although the company decided to pay a cash dividend of 100 won per share in March of this year and is considering a share buyback, its market capitalization stands at around 19.4 billion won.

WAPS Co., Ltd. manufactures automotive interior materials and polymer materials for construction and household use. In the first half of this year, on a consolidated basis, revenue was 21.1 billion won, operating profit was 2.2 billion won, and the operating profit margin was 10.5%. In particular, the company’s Vietnamese subsidiary has been profitable for three consecutive years, and increased sales of functional materials drove the improvement in performance. While continuing to supply golf ball materials through its Vietnamese subsidiary, the company is also pursuing commercialization of lithium-ion separator materials as a new growth engine. Although it is taking steps to manage its stock price—such as initiating a share buyback worth approximately 1 billion won in July—its market capitalization stands at 19 billion won.

Fashion Platform Co.,Ltd. is an apparel distribution company that operates women’s clothing brands such as The Renoma, Bonispa, Le Shop Blanc, and Liette Deco. In the first half of this year, on a consolidated basis, revenue totaled 52.3 billion won, with operating profit of 7.3 billion won, resulting in an operating profit margin of approximately 14%. Following the cancellation of 1,029,831 treasury shares in March, the company carried out a stock consolidation in May. In June, the company announced a medium- to long-term shareholder return policy stating that, for the three-year period from 2026 to 2028, it would allocate at least 10% of its adjusted net income (on a non-consolidated basis) to dividends, share buybacks, and share cancellations. However, its market capitalization remains at 15.4 billion won.

What these companies have in common is that, while their market capitalization falls short of the delisting threshold, they maintain profitability with operating profit margins exceeding 5% and generate profits from their core businesses. In addition, they are continuing to take measures to enhance corporate value, such as shareholder returns and business expansion. Nevertheless, as stock prices have not fully reflected these efforts, questions are being raised about the effectiveness of the market capitalization-based delisting system.

As the market capitalization threshold is set to be raised to 30 billion won in the future, these concerns are expected to grow even louder. An official from a KOSDAQ-listed company lamented, “As KOSDAQ’s market capitalization criteria become stricter, the number of companies exiting the market will inevitably increase,” adding, “We are burdened with tasks that undermine our core business competitiveness, such as monitoring stock price trends.” The official continued, “It is necessary to establish criteria that comprehensively consider a company’s actual business performance—such as operating profit—in addition to market capitalization.”