As of the closing on the 20th, 113 KOSDAQ stocks excluding managed and investment warning stocks traded below 1000 won, triggering concerns over Korea Exchange's strengthened listing maintenance criteria. Of these penny stocks, 36 belong to premium or mid-tier corporate segments with market capitalizations above 30 billion won, according to Korea Exchange and the financial investment industry. The price-based delisting threshold has intensified pressure on companies despite some maintaining profitability and operational scale, prompting debate over whether low share price alone accurately reflects corporate viability in a market where share count and capital structure significantly influence trading price independent of business fundamentals.
Profitable Companies Face Delisting Pressure Under Penny Stock Label
The 113 stocks trading below 1000 won include companies that industry observers argue cannot be classified simply as distressed entities based on market segment classification or corporate scale. Among the 36 premium and mid-tier segment companies with market caps exceeding 30 billion won, several demonstrate consistent profitability that contradicts the penny stock distress narrative.
Korea Capital and Inji Display Maintain Profits Despite Sub-1000 Won Trading
Korea Capital (023760) traded at 708 won while maintaining premium segment status and a market capitalization of 223.5 billion won. The company reported consolidated operating profits of 82.1 billion won, 96.9 billion won, and 127.9 billion won over the most recent three-year period, demonstrating year-over-year growth. Inji Display (037330) similarly traded at 926 won as a premium segment member, recording consolidated operating profits of 5.3 billion won, 10.9 billion won, and 17.1 billion won over the same timeframe.
Share price levels reflect not only corporate fundamentals but also par value, outstanding share count, and historical capital increase activities. Companies with identical market capitalizations can exhibit different share prices based on issued share volume, and frequent paid-in capital increases or convertible bond conversions expand share count, mechanically lowering per-share price regardless of operational performance.
Experts Criticize Price-Only Criteria as Insufficient Viability Indicator
Professor Jeong Do-jin of Chung-Ang University's Business School stated that not all penny stocks warrant delisting consideration for KOSDAQ market purposes. "Companies with undervalued enterprise value due to capital market supply-demand dynamics despite possessing actual value and sustainability should be distinguished," Jeong said. He added that companies demonstrating return on assets exceeding capital procurement costs warrant sustainability recognition, questioning whether such firms should face delisting.
Under current rules, stocks trading below 1000 won for 30 consecutive trading days receive managed stock designation. Failure to maintain prices above 1000 won for 45 of the subsequent 90 trading days triggers delisting procedures. This formal delisting criterion operates without substantive review of financial performance or growth potential, applying quantitative standards without qualitative assessment—unlike market cap shortfall provisions that permit appeals.
Industry Calls for Financial Health Assessment Alongside Price Thresholds
One industry source described growing pressure from government expectations that companies should conduct investor relations activities to elevate share prices, while noting that profitable companies in sectors outside market attention or smaller-scale firms face limited IR effectiveness. "For companies located in regional areas, traveling to Seoul for IR sessions involves time and cost burdens," the source said.
Another industry representative advocated for supplementary mechanisms examining financial condition, technological capability, and growth potential rather than focusing solely on market capitalization or share price. "If market cap falls below certain standards, companies should present value-up plans, and regulators should investigate whether financial issues exist or whether fundamentally sound companies simply lack market recognition," the source stated. The representative called for institutional refinement that delists companies unable to function as listed entities while providing pathways for companies with development potential.
Counterargument Emphasizes Need for Strict Zombie Company Elimination
Professor Lee Chang-min of Hanyang University's Business Department countered that penny stock and low market cap company elimination remains necessary. "Historical patterns show that broad exception provisions often neutralize the effectiveness of newly introduced systems," Lee said. He argued that without firm action on KOSDAQ issues, fundamental problems of distressed company elimination and market trust restoration cannot be resolved.
Jeong emphasized that implementation precision determines policy success. "If delisting results from capital market supply-demand factors rather than fundamental issues, responsibility from government or exchange market operation transfers to companies," he stated. Jeong advocated for expert involvement in applying conditional quantitative judgments to penny stocks, noting that while government appropriately sets policy, experts should handle implementation to minimize adverse effects.
FAQ
How many KOSDAQ stocks currently trade below 1000 won?
As of the closing on the 20th, 113 KOSDAQ stocks excluding managed and investment warning stocks traded below 1000 won. Among these, 36 belong to premium or mid-tier corporate segments with market capitalizations above 30 billion won.
What happens when a KOSDAQ stock trades below 1000 won for 30 consecutive days?
Stocks trading below 1000 won for 30 consecutive trading days receive managed stock designation. If the stock fails to maintain prices above 1000 won for 45 of the subsequent 90 trading days, delisting procedures begin without substantive review of financial performance or growth potential.
