KOSDAQ's '1 Trillion Won Market Cap Club' Reaches 48 Members... All-Time High

[Asia Economy Reporter Koh Hyung-kwang] It has been revealed that the number of listed companies with a market capitalization of over 1 trillion won in the KOSDAQ market is approaching 50. This represents an increase of more than 80% compared to the end of last year, marking the largest scale ever. This is interpreted as reflecting the nearly 30% rise in the KOSDAQ index this year, as well as the surge in value of pharmaceutical and bio-related stocks due to the spread of the novel coronavirus infection (COVID-19).

According to the Korea Exchange on the 10th, as of the closing price on the 7th, there were a total of 48 companies in the KOSDAQ market with a market capitalization exceeding 1 trillion won. Considering that there were 26 companies at the end of last year, this means that 22 companies (84.6%) have increased in just seven months, making it the largest number of '1 trillion won market cap club' members ever. Even on January 29, 2018, when the KOSDAQ index hit an all-time high (932.01), there were only 42 companies with a market cap over 1 trillion won, fewer than this year. Compared to March 19, when the KOSDAQ index hit its yearly low (428.35) and there were only 15 companies with over 1 trillion won market cap, the number has more than tripled. This contrasts with the KOSPI market, where the number of stocks with a market cap over 10 trillion won decreased from 31 (including preferred shares) at the end of last year to 29 this month.

As of the 7th, the only company in the KOSDAQ with a market capitalization over 10 trillion won is Celltrion Healthcare (16.155 trillion won), and there is only one stock, Seegene (8.1902 trillion won), in the 5 to 10 trillion won range. However, there are 12 stocks between 2 trillion and 5 trillion won, including HL Biopharma, Celltrion Pharm, and EcoPro BM, and a remarkable 34 stocks in the 1 trillion won range, ranked from 15th (Hugel, 1.9613 trillion won) to 48th (L&C Bio, 1.005 trillion won).

The rapid increase in the number of '1 trillion won club' members is partly due to the KOSDAQ index rising 28.1% from 669.83 at the end of last year to 857.63 on the 7th, but more importantly, it reflects the significant increase in value of pharmaceutical, bio, IT, and gaming-related companies amid the spread of COVID-19.

Market capitalization of Celltrion Healthcare, the top KOSDAQ company, increased by 111.7% from 7.6281 trillion won at the end of last year to 16.155 trillion won. Similarly, the market caps of 6th and 8th ranked companies, Alteogen (929.6 billion won → 2.7991 trillion won) and Genexine (1.485 trillion won → 3.0342 trillion won), more than doubled during the same period, showing a significant increase in bio-related stocks. In particular, Seegene, the leading diagnostic kit company, surged more than tenfold from 804 billion won at the end of last year to 8.1902 trillion won on the 7th.

However, there are concerns that the top market cap stocks leading the KOSDAQ are dominated by pharmaceutical and bio companies. Among the 48 '1 trillion won club' members, 20 are pharmaceutical and bio companies, making up the majority. A financial investment industry official said, "It is welcome that the value of major listed companies is rising due to the KOSDAQ rally," but added, "However, there are some concerns about the excessive concentration on bio stocks and the overheated trend resembling blind investment."