The struggle to avoid delisting is not limited to penny stocks. Numerous companies on the KOSDAQ market face risks of delisting due to violations of disclosure regulations, rejected audit opinions, and capital erosion. The traditional method of temporarily boosting stock prices to evade crises is becoming increasingly difficult as financial authorities tighten monitoring and delisting criteria.
According to the Korea Exchange, starting in the second half of this year, the monitoring system for management-designated stocks will be strengthened. Previously, companies designated as management stocks could avoid delisting if they met market capitalization criteria (200 billion won this half-year and 300 billion won next year) for 10 consecutive trading days or a cumulative total of 30 trading days within 90 trading days. However, under the new rules, companies must meet the market capitalization criteria for 45 consecutive trading days to avoid delisting. This means that even temporary stock price increases due to favorable news could still lead to delisting risks.
For instance, ABPROBIO, a KOSDAQ-listed company, was designated as a management stock in March due to a capital erosion rate of 61.8%. In response, the company has initiated measures to bolster its capital, including a 90% capital reduction, a rights offering, and the issuance of convertible bonds. Despite these efforts, its stock price fluctuates around 1,000 won, keeping its market capitalization at approximately 32 billion won. If the company's value deteriorates further, maintaining its listing could become increasingly challenging.
Similarly, companies like DAP and Iwon CompoTech have been newly designated as management stocks this year due to capital erosion rates exceeding 50%. Iwon CompoTech's stock price is currently at 1,552 won, with a market capitalization of 12.4 billion won, raising concerns about its ability to meet the strengthened market capitalization criteria. DAP's stock price and market capitalization stand at 1,883 won and 41.7 billion won, respectively, which meet this year's listing maintenance requirements, but the increase to 300 billion won next year leaves little room for error.
As the criteria for delisting-related penalties have been tightened, the company with the highest accumulated penalty points is Coas, with 42 points. Coas was designated as an unreliable disclosure company after being found to have delayed disclosures or provided inaccurate information during the acquisition of stocks from Iwha Electric, Etron, and EID last October. If it receives additional penalty points, it could be subject to delisting review.
DawanSys follows closely behind with 23 accumulated penalty points. The company is currently suspended from trading due to a delisting cause stemming from a rejected audit opinion on its financial statements last year. Its revenue dropped by over 70% compared to the previous year, and its operating losses exceeded 100 billion won. Additionally, the termination of a contract for supplying electric trains to Korail has heightened concerns about its operational normalization. Even if issues related to audit opinions are resolved in the future, the burden of accumulated penalty points remains a concern.
Industry experts believe that the recent reforms to the delisting system will not only introduce new criteria but also mark the beginning of a serious effort to address struggling companies. Lee Geon-jae, a researcher at IBK Investment & Securities, stated, "While more than 90 companies are newly listed on the KOSDAQ market each year, the number of companies being delisted is less than half. We need to address the structural issues of unprofitable companies that have not resolved problems such as poor business performance, lack of communication with investors, and capital erosion to achieve qualitative improvement in the KOSDAQ market."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.