Companies listed on the stock exchange are expanding their investor relations (IR) activities beyond regulatory disclosures and exchange responses to include meetings with institutional investors and analysts, shareholder engagement, and explanations of corporate value. As the burden of managing stock prices and market capitalization increases due to stricter delisting criteria, companies are actively seeking to communicate their business performance and enhance connections with investors.
According to the financial investment industry on September 21, IR representatives from listed companies are not only focusing on earnings announcements and disclosure document preparation but are also increasing meetings with institutional investors and analysts, as well as directly addressing shareholder inquiries to strengthen market communication. In particular, for companies at risk of being designated as management issues, IR representatives are taking on the responsibility of explaining relevant criteria and response strategies to investors.
The backdrop to this shift is the tightening of delisting criteria. Since July, the government and the Korea Exchange have raised the market capitalization threshold for delisting from 20 billion won to 30 billion won for KOSPI-listed companies and from 15 billion won to 20 billion won for KOSDAQ-listed companies. As of the last trading day, there are 97 KOSPI companies with a market capitalization below 30 billion won and 172 KOSDAQ companies below 20 billion won. Additionally, companies whose stock prices remain below 1,000 won for more than 30 trading days are subject to management designation, increasing the need for proactive communication with shareholders and investors.
A representative from the financial investment industry stated, "To respond to delisting risks, companies must actively communicate their performance and business details and be able to address market concerns." They added, "The importance of IR activities has grown compared to the past." This is particularly true for small and mid-sized listed companies, where a small number of staff often handle everything from preparing performance and disclosure materials to responding to inquiries from exchanges, institutions, shareholders, and the media, leading to increased workload.
The trend of expanding IR activities is also seen among mid-sized companies. SY Dong-A, which has been in operation for over 50 years, recently held its first-ever corporate briefing. This initiative, separate from delisting risks, involved executives directly engaging with the market to explain the business and corporate value, thereby broadening connections with investors. Changes are also occurring in the IR personnel market, as professionals from research firms and the securities industry with strong analytical and industry knowledge are increasingly moving into IR roles at listed companies, creating a growing demand for personnel who can explain corporate value and business content from an investor's perspective rather than just focusing on promotion.
With the list of companies with low price-to-book ratios (PBR) set to be published on November 2, the demand for IR activities related to corporate value is expected to increase further. There is anticipated demand for explanations regarding the causes of undervaluation and strategies for improving corporate value, particularly for these companies. An industry representative remarked, "It has become crucial to provide shareholders with explanations of corporate value and evidence to understand the company's business direction," adding, "Concerns have been raised about the difficulty of communicating with IR, but this aspect is expected to improve to some extent."
* This article has been translated by AI.
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