Domestic brand stocks including pen maker Monami and seafood processor Hansung Enterprise surged in two weeks following stricter delisting criteria implemented this month. Monami rose 187% from 1,200 won to 3,445 won, while Hansung Enterprise jumped 245% from 4,210 won to 14,520 won, according to Korea Exchange on the 17th. The surge was triggered by new market cap thresholds requiring KOSPI-listed companies to maintain at least 300 billion won and KOSDAQ companies 200 billion won to avoid delisting review. Investor sentiment rallied around preserving familiar Korean brands, with Monami's market cap expanding from 226 billion won to 651 billion won by the 15th.
Monami and Hansung Enterprise Record Triple-Digit Gains
Monami's stock price climbed from 1,200 won at the end of last month to 3,445 won on the 15th of this month, marking a 187% increase within two weeks. The stock hit the 30% daily upper limit on the 15th. Monami's market cap stood at 226 billion won at the end of June, significantly below the 300 billion won threshold. Investors mobilized under the sentiment "we cannot let Monami, a pen brand used since childhood, be delisted," driving the market cap to 651 billion won by the 15th.
Hansung Enterprise, known for its "Crabmeat" products, experienced a 245% surge from 4,210 won to 14,520 won during the same period. The company gained investor attention after its 25-year sponsorship of concerts for UN Korean War veterans became widely known. Its market cap reached 902 billion won.
Furniture and interior company Enex rose 102% following reports of its donations of student furniture, beds, and storage units to childcare facilities and welfare organizations. Vivien, a 69-year-old women's underwear brand, climbed 59%. All are KOSPI-listed companies.
Korea Exchange Implements Stricter Delisting Thresholds
The government announced a "delisting reform plan" to swiftly and strictly remove underperforming companies from the market. Under the new criteria applied from this month, KOSPI companies with market caps below 300 billion won and KOSDAQ companies below 200 billion won face delisting review. From January, these thresholds will rise to 500 billion won for KOSPI and 300 billion won for KOSDAQ.
Enex (market cap 251 billion won) and Vivien (market cap 255 billion won) remain below the 300 billion won threshold despite recent gains. Companies that cleared the current threshold must meet the 500 billion won requirement by January.
KB Securities Analyst Issues Investment Risk Warning
Both Monami and Hansung Enterprise were designated as investment warning stocks. Investment warning designation alerts investors to overheated short-term trading, and continued sharp price increases may result in additional sanctions including investment risk stock designation or trading suspension.
Im Jeong-eun, researcher at KB Securities, stated, "As Korea's delisting criteria strengthen, the pace of market exit for low-priced stocks, small-cap stocks, and persistently loss-making companies is expected to accelerate." Im advised, "Investors need to regularly check whether their holdings may enter delisting requirements."
Im added, "Monitoring market cap and stock price trends is essential. Total equity on financial statements can be checked through the Financial Supervisory Service's DART system, and disclosure violations and unfaithful disclosure records can be confirmed through Korea Exchange's KIND channel. Also note that if delisting risk becomes prominent as requirements are approached, the outflow of investment funds from the market may accelerate."
FAQ
What triggered the surge in Monami and Hansung Enterprise stocks?
The government's announcement of stricter delisting criteria effective this month triggered the surge. New thresholds require KOSPI companies to maintain market caps above 300 billion won and KOSDAQ companies above 200 billion won to avoid delisting review. Investors rallied to prevent familiar Korean brands from being delisted, concentrating investments in companies near the threshold.
What are the investment risks associated with these stocks?
Both Monami and Hansung Enterprise were designated as investment warning stocks due to short-term overheating. Continued sharp price increases may result in additional sanctions including trading suspension. Additionally, temporary price surges alone cannot prevent delisting, as thresholds will rise to 500 billion won for KOSPI and 300 billion won for KOSDAQ from January. Im Jeong-eun of KB Securities advised investors to regularly monitor their holdings' delisting risk through DART and KIND systems.
