Shares of Sonogong are experiencing a significant rise as investors rally around so-called 'patriotic stocks' in response to stricter market capitalization requirements for KOSDAQ-listed companies. The company's expansion into artificial intelligence (AI) wellness is also believed to be boosting investor sentiment.
As of 10:39 a.m. on July 21, Sonogong's stock was trading at 3,365 won, up 13.30% from the previous trading day, according to the Korea Exchange.
This surge is attributed to discussions in online communities highlighting Sonogong as a domestic toy brand and a long-standing company, categorizing it as a 'patriotic theme stock.'
Concerns over stricter delisting criteria for KOSDAQ companies have further fueled buying activity. Under revised regulations effective July 1, companies with a market capitalization below 20 billion won will be designated as management items, and failure to meet related requirements could lead to delisting. Starting next year, the threshold will increase to 30 billion won.
As buying efforts to prevent delisting continue, Sonogong's market capitalization has rapidly increased. It rose from approximately 23.1 billion won on July 14 to 23.5 billion won on July 15, 30.6 billion won on July 16, and 39.8 billion won on July 20.
The announcement of Sonogong's expansion into the AI wellness sector has also contributed to the stock's rise. On July 17, the company announced it had signed an exclusive distribution agreement for the AI massage robot 'R2E' with EaseFuture, a healthcare startup owned by Chinese internet company NetEase.
Through this agreement, Sonogong plans to secure not only product rights but also branding rights, allowing it to implement a market strategy tailored to the domestic audience.
However, investors are advised to exercise caution due to the recent rapid increase in stock prices. Sonogong has been designated as an 'investment caution item' by the Korea Exchange due to the surge in its stock price and trading volume.
Founded in 1996, Sonogong primarily engages in the production of character toys, figures, merchandise, and the distribution of Nintendo gaming consoles and software. It also operates as an official dealer for Volkswagen through its subsidiary, Classe Auto.
* This article has been translated by AI.
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