Stock Prices Rise in 21 out of 40 Locations
[Asia Economy Reporter Oh Ju-yeon] Among the companies that changed their trade names in the first half of this year, half succeeded in increasing their stock prices. This is interpreted as being supported by the stock market rebound since the new coronavirus infection (COVID-19) in March this year.
According to the Korea Securities Depository and financial information company FnGuide on the 3rd, a total of 55 listed companies changed their trade names by the end of last month, an increase of 2 companies (3.8%) compared to 53 companies in the same period last year. By market, 18 companies changed their names in the KOSPI market, up 2 from 16 companies in the same period last year, while 37 companies changed their names in the KOSDAQ market, the same as last year.
The reason for changing trade names was 'enhancing company image (brand value improvement)' with 22 companies, accounting for 40.0% of the total, the highest proportion. Next was 'company split/merger' with 15 companies (27.3%), followed by 'business area expansion or diversification' with 8 companies (14.5%), and 'management purpose and strategy enhancement' with 5 companies (9.1%).
The number of listed companies changing their names is on the rise. In 2018, 80 companies changed their trade names throughout the year, but last year, the number increased to 95. Considering that 4 out of 10 companies change their names for image enhancement, it is interpreted that listed companies choose to change their signboards as one of the strategies to overcome stock price declines or management difficulties. In the second half of 2018, when the stock market fell sharply, 8 out of 10 companies that changed their names experienced stock price declines, so this method did not work well, but in the first half of this year, it was effective thanks to the stock market rebound.
Among the companies that changed their trade names in the first half of this year, excluding SPACs, trading suspensions, and preferred stock items, 21 out of 40 listed companies saw their stock prices rise after changing their company names. The company with the highest stock price increase was Cellmat Therapeutics, which changed its name from MediPartner Life Science for the purpose of enhancing management objectives and strategies. The stock price, which was 4,100 KRW before the name change, rose 72.20% to 7,060 KRW as of 10 a.m. on the day.
Companies that changed their names for image enhancement, such as IME Yeon-i (formerly Yeon-i Information & Communication) and HMM (formerly Hyundai Merchant Marine), also saw their stock prices rise by 40.14% and 33.75%, respectively. Even in the steel industry, which was sluggish due to the COVID-19 impact, stock prices rose after removing 'Steel' from their trade names. Youngheung Steel changed its name to 'Youngheung' in April, and its stock price rose about 11.85%. Meritz Securities also saw a slight increase in stock price after removing 'Jonggeum' and changing its name to 'Meritz Securities' in April.
On the other hand, FILA Korea showed a contrast by falling 28.28% after changing its name to 'FILA Holdings.' SK Rent-a-Car (formerly AJ Rent-a-Car) and LG HelloVision (formerly CJ Hello) also saw their stock prices fall by double digits after changing their trade names.
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