Top KOSDAQ Stocks by Market Cap Shaking Again

Market Cap Increases by 740 Billion Won... Q2 Earnings and COVID-19 Treatment Issues as Competitive Factors
SiGene Rises to 2nd Place on Earnings Expectations
Genexine 7th Due to Vaccine Issues

[Asia Economy Reporter Song Hwajeong] As the KOSDAQ index surpassed the 800 mark, the competition among the top market capitalization stocks is intensifying again. Q2 earnings and issues related to the development of COVID-19 treatments are acting as variables in the market cap race.

According to the Korea Exchange on the 28th, the combined market capitalization of the top 10 KOSDAQ stocks increased from 45.2857 trillion KRW at the end of last month to 46.0244 trillion KRW as of the previous day. Although the market cap size only increased by about 740 billion KRW, the rankings changed significantly.

First, Seegene, which was ranked 5th at the end of last month, surged to 2nd place. Seegene's market cap grew by about 2.7 trillion KRW compared to the end of last month, rising from the 2 trillion KRW range to the 5 trillion KRW range. As Seegene rose, HL Biopharma and Celltrion Pharm, which were 2nd, each dropped one rank. Seegene's strength is due to expectations for Q2 earnings. Seegene is expected to record its highest earnings in Q2. According to financial information provider FnGuide, Seegene's Q2 earnings consensus is 256.6 billion KRW in sales and 156.2 billion KRW in operating profit. This represents increases of 775.77% and 3295.65%, respectively, compared to the same period last year. Shin Jaehoon, a researcher at Hanwha Investment & Securities, said, "Seegene's Q2 earnings are expected to record the highest ever due to COVID-19 diagnostic sales," adding, "These earnings are likely to be maintained until the development of COVID-19 treatments and vaccines, and even after that, stable sales will occur as a major COVID-19 diagnostic kit company."

Genexine, which was outside the top 10 at the end of last month, entered the 7th position on expectations for a COVID-19 vaccine. Genexine, developing COVID-19 preventive vaccines and treatments, is conducting clinical trials for its COVID-19 preventive DNA vaccine 'GX-19.' Genexine rose 35% compared to the end of last month.

Ecopro BM, which was 8th at the end of last month, surged to 5th place. Ecopro BM rose 13.7% compared to the end of last month. Ecopro BM's earnings also served as the driving force behind the stock price increase. Ecopro BM achieved Q2 sales of 189.9 billion KRW, up 39.7% year-on-year, and operating profit of 13.9 billion KRW, up 25.7%, exceeding market expectations.

SK Materials also re-entered the top 10, led by strong Q2 earnings. SK Materials started the year ranked 8th in market cap but fell out of the top 10 by the end of January. However, with recent strong Q2 earnings, it succeeded in re-entering. SK Materials recorded Q2 sales of 227.4 billion KRW and operating profit of 56.57 billion KRW, increases of 24.3% and 2.8%, respectively, compared to the same period last year. So Hyuncheol, a researcher at Shinhan Investment Corp., explained, "Q2 earnings exceeded consensus due to increased operating rates of display companies, growth in high value-added semiconductor precursors and tungsten hexafluoride (WF6), and stabilization of nitrogen trifluoride (NF3) prices."

On the other hand, Alteogen, which was 4th at the end of last month, dropped to 11th, falling out of the top 10. Alteogen, which once rose to 3rd place in market cap with a rapid rise after COVID-19, is believed to have dropped in ranking due to fluctuations caused by a recent bonus issue. Alteogen's market cap decreased by more than 1 trillion KRW, from 3.7299 trillion KRW at the end of last month to 2.4353 trillion KRW.

Studio Dragon, which had maintained a top 10 position this year, also fell out of the top 10, and Pearl Abyss dropped from 6th to 10th. Pearl Abyss's stock price decline appears to be due to expectations that Q2 earnings will fall short. Lee Jinman, a researcher at SK Securities, analyzed, "Pearl Abyss's Q2 earnings are expected to fall short of consensus with sales of 122.1 billion KRW and operating profit of 36.8 billion KRW," adding, "This is because the sluggish performance of 'Black Desert Mobile,' which accounts for the largest sales proportion, continues." SK Securities lowered Pearl Abyss's target price to 192,000 KRW, suggesting a need to lower expectations for short-term earnings.