Semiconductors Decline, Bio and Entertainment Rise: The Changing KOSDAQ Landscape

Celltrion Healthcare Reclaims Top Spot
Strong Performance Expected in Second Half
Alteogen and ST Pharm Also Surge

Memory Semiconductor Cycle Decline Narrows Positions of Rino Industrial, Dongjin Semichem, and Others

[Asia Economy Reporter Minji Lee] The competition for rankings among the top market capitalization stocks on the KOSDAQ is intensifying. Celltrion Healthcare, which had been shunned by investors during the interest rate hike period, has made a comeback to the top spot in market capitalization, while entertainment stocks saw significant ranking fluctuations thanks to surprising earnings. On the other hand, semiconductor-related companies experienced notable declines in rankings due to sluggish industry conditions.

According to the Korea Exchange on the 25th, as of the previous day, the company with the largest market capitalization on the KOSDAQ market is Celltrion Healthcare, with a market cap of 11.44 trillion KRW. The difference from EcoPro BM (11.276 trillion KRW), a secondary battery cathode material producer ranked second, is about 200 billion KRW. Three months ago (May 25), influenced by the interest rate hike, Celltrion Healthcare’s stock price plummeted over 25% from 80,200 KRW to 60,100 KRW since the beginning of the year, causing it to remain in second place in market capitalization rankings. During the period when investment sentiment was focused on secondary battery material stocks, it even fell two places behind L&F (3rd place, 8.3141 trillion KRW). However, since last month, with positive earnings momentum, the stock price surged sharply, reclaiming its position as the KOSDAQ leader. During this period, Celltrion Healthcare’s stock price increased by 20%.

Strong sales of major biosimilar products acted as a tonic for the stock price. Following the first half, Remsima IV, Remsima SC, Truxima, and Herzuma are expected to record solid sales in the second half as well. The securities industry has already raised its annual profit estimates, with the consensus profit increasing by 30 billion KRW from 250 billion KRW three months ago to 283 billion KRW. Donggeon Lee, a researcher at Shinhan Financial Investment, said, "The growth of key products such as Remsima IV, Remsima SC, and Truxima will continue in the second half. Although cost issues related to the transition to direct sales in the U.S. early next year are weighing on the stock price, it will rather lead to improved profitability."

Other bio stocks also showed noticeable ranking increases. Alteogen, which possesses Hybrozyme technology that converts intravenous (IV) injections to subcutaneous (SC) injections, jumped from 12th to 8th place, and ST Pharm, engaged in new drug development and contract development and manufacturing organization (CDMO) services, surged from 21st to 16th place.

The rise of entertainment stocks was also remarkable. JYP Ent. climbed seven places from 19th to 12th, and SM Entertainment entered the top market cap stocks at 20th place. Over the past two years, due to COVID-19, artists’ activities were restricted, resulting in poor earnings and stock performance. However, this year, all artists from each company actively released albums and held performances, boosting the entertainment companies’ earnings. In particular, JYP Ent. is expected to record an annual operating profit of around 100 billion KRW for the first time, driven by the re-contracting of its key artist TWICE and significant increases in album sales of ITZY and Stray Kids. Fueled by this optimism, the company’s stock price rose more than 11% over three months.

Conversely, the position of semiconductor stocks has significantly narrowed due to the downturn in the memory semiconductor cycle. Semiconductor test socket manufacturer Lino Industrial fell from 10th to 14th place, and semiconductor material company Dongjin Semichem dropped two places to 17th. Solbrain fell one place to 18th, and LX Semicon was pushed out of the top 20. Equipment maker Wonik IPS also failed to make the list. With poor earnings and stock performance of semiconductor front-end companies and reduced investment plans, investor sentiment toward material and equipment companies has weakened. Chodoyeon, an analyst at Shinhan Financial Investment, explained, "Memory semiconductor prices are falling more than expected, and orders are decreasing due to inventory burdens. The rebound in the memory market is expected around the first quarter of next year when front-end inventory is depleted."