KOSDAQ 'Game of Thrones'... Avoid Short Selling

EcoPro BM vs Celltrion Healthcare
Battle for the KOSDAQ Leading Stock Position
KOSDAQ No.1 Company Also Tops Short Selling Balance

The KOSPI opened at 2,481.66, up 34.28 points (1.40%) from the previous trading day. On the 16th, employees are working in the dealing room of Hana Bank in Jung-gu, Seoul. The KOSDAQ index started at 812.95, rising 13.54 points (1.69%), and the won-dollar exchange rate began at 1,278.0 won, down 12.5 won. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Ji Yeon-jin] A fierce battle is underway for the top spot among KOSDAQ leading stocks. This year, the number one stock by market capitalization on the KOSDAQ has changed for the first time in four years, with the position being repeatedly defended and reclaimed. Short selling has been concentrated on these KOSDAQ leading stocks.

According to the Korea Exchange on the 16th, as of that date, Celltrion Healthcare's market capitalization stood at 12.2479 trillion KRW, recording the highest corporate value in the KOSDAQ market. EcoPro BM ranked second with a market capitalization of 11.6383 trillion KRW. As of the closing price on the 5th, EcoPro BM's valuation was 12.1273 trillion KRW, surpassing Celltrion Healthcare's 11.9406 trillion KRW, but on the 8th, it plunged more than 5% in a single day, ceding the top KOSDAQ spot back to Celltrion Healthcare.

The ranking battle between the two stocks dates back to January this year. On January 18, EcoPro BM overtook Celltrion Healthcare to become the number one stock by market capitalization on the KOSDAQ for the first time. Celltrion Healthcare had held the top KOSDAQ position since Celltrion moved to the KOSPI market in February 2018, but with expectations of growth in the electric vehicle market, it lost the spot for the first time in four years. However, Celltrion reclaimed the top KOSDAQ spot the very next day, and the following day EcoPro BM retook it, resulting in the number one KOSDAQ market capitalization changing hands eight times this year.

EcoPro BM rebounded based on the strong performance of the U.S. electric vehicle manufacturer Tesla, boasting the highest valuation in the KOSDAQ market since the 21st of last month. It especially surged ahead of its second-quarter earnings announcement. However, after reporting its first quarterly sales exceeding 1 trillion KRW in Q2, concerns about a 'peak out' caused the stock price to retreat. On the other hand, Celltrion has seen its corporate value steadily rise since announcing second-quarter earnings on the 5th that exceeded market expectations.

The market expects both companies to achieve solid performance in the second half of the year, so the ranking battle is likely to continue for the time being. In the case of EcoPro BM, it is forecasted to record earnings exceeding market expectations in the third quarter as electric vehicle sales expand, and most securities firms have recently raised their target prices.

Lee Chang-min, a researcher at KB Securities, explained, "The steep improvement in earnings is expected to continue into next year." Celltrion Healthcare is also expected to perform well based on the expanded U.S. prescriptions of the biosimilar Remsima. Lee Dal-mi, a researcher at SK Securities, stated, "Starting with the full-scale sales expansion of Remsima SC this year, the launch of the Avastin biosimilar in Europe in the second half of the year is expected to expand sales next year, sustaining steady growth due to new product launches."

Additionally, short selling of the KOSDAQ leading stocks could be a variable in the battle for the top spot between the two companies. EcoPro BM's corporate value surged this year, leading to a sharp increase in short selling; as of the 10th, its short selling balance exceeded 400 billion KRW, marking the largest scale in the KOSDAQ market. On the 12th, EcoPro BM also recorded the highest short selling transaction amount, with short sales worth approximately 24 billion KRW. Meanwhile, Celltrion Healthcare had the largest short selling balance in the KOSDAQ market at 210.6 billion KRW as of January 3, but this decreased to 134.5 billion KRW as of the 10th.