Major KOSDAQ-listed companies including Alteogen, EcoproBM, and HLB postponed planned transfers to the KOSPI market, with Alteogen announcing its decision on the 16th. The postponements reflect expectations for government KOSDAQ revitalization policies and concerns about liquidity concentration in the KOSPI market dominated by Samsung Electronics and SK Hynix. South Korea operates a two-tier stock market system where KOSDAQ serves as the secondary market and KOSPI as the main board, with companies traditionally seeking to upgrade from KOSDAQ to KOSPI as they grow.
Three Major KOSDAQ Companies Postpone KOSPI Transfers
Alteogen suspended its KOSPI transfer plan on the 16th, according to the financial investment industry. The company had previously approved conditional delisting from KOSDAQ and transfer listing to the securities market at an extraordinary shareholders' meeting in December. Alteogen holds a market capitalization of approximately 14 trillion won, making it the largest stock on KOSDAQ.
EcoproBM halted its KOSPI transfer process after submitting a preliminary review application to the Korea Exchange's securities market division in November of last year. The company officially withdrew the preliminary application through a disclosure in February. HLB, which announced its transfer listing plans earlier than Alteogen, also stopped the process.
Government KOSDAQ Revitalization Policies Drive Decision
Financial authorities introduced various KOSDAQ activation policies this year, including a promotion and demotion system. The companies cited inability to receive proper corporate value assessments in a depressed market as justification for transfers. Market valuation directly connects to capital raising capacity.
Alteogen stated: "After comprehensively reviewing changes in the capital market environment, KOSDAQ market revitalization policies currently being promoted by the government and Korea Exchange, and the company's growth strategy, we determined that remaining in the KOSDAQ market at this point aligns with enhancing corporate value and maximizing shareholder interests."
EcoproBM indicated it would observe earnings recovery trends before reconsidering the transfer, though analysts note the company is also monitoring KOSDAQ revitalization policy effects. The secondary battery industry requires large-scale investment. If the KOSDAQ market experiences valuation improvements, large-cap stocks within the market gain significant advantages for large-scale fundraising. Capital increases are determined based on current stock prices. EcoproBM is currently pursuing a 1.2 trillion won capital increase, though financial authorities requested report corrections.
KOSPI Liquidity Concentration Raises Concerns
Current securities market conditions including liquidity concentration are not particularly attractive. Samsung Electronics and SK Hynix, as mega-cap stocks, are absorbing market liquidity. The situation intensified following the launch of single-stock leveraged products using these stocks as underlying assets.
If major KOSDAQ stocks transfer to KOSPI, they would likely be included in the KOSPI 200 index. While KOSPI 200-tracking funds are larger than KOSDAQ 150 funds, the size of top stocks including Samsung Electronics and SK Hynix grew excessively over the past year. Exchange-traded funds (ETFs) and index funds tracking KOSPI 200 face structural limitations in incorporating former KOSDAQ large-cap stocks. Position within the index matters more for capital inflows than market size.
Historical Transfer Data Shows Market Cap Declines
All seven companies that transferred to listing in the past five years experienced market capitalization decreases one year after listing. POSCO DX, which transferred to KOSPI on January 2, 2024, saw its market cap shrink more than threefold from 10.582 trillion won immediately before listing to 2.934 trillion won over one year. L&F, which listed in January of the same year, decreased from 5.578 trillion won to 3.151 trillion won.
FAQ
What did Alteogen announce on the 16th regarding its stock market listing?
Alteogen announced on the 16th that it suspended its plan to transfer from KOSDAQ to the KOSPI market. The company had previously approved the transfer at an extraordinary shareholders' meeting in December but decided to remain on KOSDAQ after reviewing capital market changes and government KOSDAQ revitalization policies.
Why are major KOSDAQ companies postponing transfers to KOSPI?
Companies are postponing transfers due to expectations for government KOSDAQ revitalization policies and concerns about unfavorable liquidity conditions in the KOSPI market. Samsung Electronics and SK Hynix currently dominate KOSPI liquidity, creating structural limitations for newly transferred stocks to attract index fund investments. Additionally, all seven companies that transferred in the past five years experienced market capitalization declines in their first year on KOSPI.
