[Edaily Reporter Kim Hyung-il ] Stock prices moved in mixed directions during the first five trading days following the Korea Exchange’s initial announcement of 151 companies with low PBR (price-to-book ratio). While KOSPI-listed companies saw slight gains, KOSDAQ-listed companies declined, and even within the same sector, individual stocks experienced mixed fortunes. This is interpreted as the result of a combination of factors affecting stock prices—such as each company’s capacity for shareholder returns and sector-specific investor sentiment—rather than the disclosure of the low-PBR list itself.

According to the Korea Exchange’s Data Marketplace on the 8th, the average price change for the 151 low-PBR companies—calculated based on closing prices on the 6th compared to the 2nd—was -0.71%. Only 56 companies rose, while 93 fell, and 2 remained unchanged. This suggests that the common characteristic of being undervalued did not lead to across-the-board buying by investors.

By market, 96 low-PBR companies on the KOSPI rose by an average of 0.28%, while 55 companies on the KOSDAQ fell by 2.43%. On the KOSPI, 43 companies rose and 53 fell, but gains in a few stocks pushed the average higher. On the KOSDAQ, only 13 stocks rose while 40 fell, indicating a relatively pronounced downtrend. Analysts suggest that differences in business structures—with the KOSPI dominated by traditional industries and the KOSDAQ characterized by a high proportion of small- and mid-cap growth companies—as well as variations in their capacity for shareholder returns influenced investor sentiment.

Choi Hyun-jae, head of the Research Center at Yuanta Securities Korea, believes that the release of the low-PBR list could fuel expectations for expanded shareholder returns. “The fact that a company has been selected as a low-PBR firm cannot be viewed as negative news in and of itself,” Choi said. “It could create expectations that companies will strengthen their shareholder return policies to raise their PBR.” However, he explained, “Since 140 of the 151 companies have a market capitalization of 500 billion won or less, it is necessary to assess whether they possess the cash and profit-generating capacity to actually implement shareholder return policies.”

The fluctuations in individual stocks were even more pronounced. KleanNara(004540)rose 65.96% to rank first in terms of percentage gain, followed by SungchangEnterpriseHoldings(000180)(18.20%) and DL(000210)(11.29%). Conversely, INZI DISPLAY COMPANY LIMITED(037330)(-16.53%), DONG IL STEEL MFG CO., LTD(002690)(-13.27%), and WonIk(032940)(-11.85%) posted double-digit declines. While expectations of increased shareholder returns may have been reflected in some stocks, it is difficult to rule out the impact of individual positive and negative factors on stock prices.

By sector, consumer staples posted the highest average return, rising 4.65%. However, excluding KleanNara, the average gain for the remaining 14 companies was a mere 0.28%. This is why it is difficult to interpret the sharp rise in a specific stock as a sign of strength across the entire sector. Materials (-0.48%) and industrials (-0.27%) also saw gains in some stocks, but their average returns were negative.

In contrast, Information Technology (-3.86%), Financials (-3.51%), and Healthcare (-2.11%) performed relatively poorly. In particular, for the Information Technology sector—which was experiencing a period marked by a correction in artificial intelligence (AI)-related stocks and a contraction in investor sentiment—it is difficult to attribute the decline solely to the release of the low PBR list. This suggests that, even among companies with low PBRs, sector-specific market conditions can have a greater impact on stock prices.

A securities industry official analyzed, “Among KOSPI companies with low PBRs, some hold cash but are reluctant to return it to shareholders, whereas on the KOSDAQ, there may be companies that lack the financial capacity to return value to shareholders due to business conditions or profitability issues.” The official continued, “While expectations regarding the ability to implement shareholder returns may have been reflected in the rise of some materials companies, the IT sector may have been more significantly affected by the broader correction across the AI value chain.”

Some observers point out that the effectiveness of the list’s disclosure depends on follow-up policies. Another securities industry official said, “It’s not as if investors refrained from investing simply because they were unaware of a company’s PBR level,” adding, “Rather than the disclosure of the list itself, what matters is how effectively this can be used as an opportunity to encourage companies to enhance shareholder returns and corporate value.” He continued, “As in Japan, there must be a continuous series of pressures and incentives directed at companies,” and added, “We need to watch how follow-up policies—such as additional benefits or penalties—are implemented.”

Companies with low PBRs are also taking steps to devise plans to enhance corporate value. An official from a low-PBR company said, “We recognize the importance of enhancing corporate value and increasing shareholder value, and we are reviewing relevant improvement measures,” adding, “We believe it is more important to include concrete actions that can actually be implemented rather than making merely formal disclosures, so we are preparing a plan and intend to announce it soon.” The official further explained, “Since stock prices do not move solely based on a low-PBR designation, we are focusing on including commitments we can actually fulfill rather than rushing to make a disclosure.”