[Reporter’s Notebook] The Tragedy of 'One-Hit Wonder' Listed Companies Riding on Themes

‘One-Hit Wonder’. It refers to a pop singer who gains popularity with just one hit song and then quietly disappears. There are also ‘one-hit wonder’ listed companies in the stock market. They enter the stock market riding on the success of a single hit product but often face tragedy by focusing solely on stock price manipulation without innovation.

SD Bioscience was listed on KOSDAQ in 2017 thanks to the success of its Bada Jaebi House mask pack. At the time, the Bada Jaebi House mask pack was so popular that 5 million units were sold every month. It was especially popular in China, but right after the listing, relations with China deteriorated due to the THAAD (Terminal High Altitude Area Defense) issue, which led to a decline in performance. Then, SD Bioscience suddenly announced last year that it would enter the battery business. This was when secondary battery-related stocks were soaring. Although unrelated to its core business, it is presumed that the company intended to ride the theme to boost its stock price. Ultimately, SD Bioscience received a disclaimer of opinion, was suspended from trading, and is currently undergoing rehabilitation procedures.

Jaigle, which produces infrared cooking devices, is on a similar path. Jaigle was listed on KOSDAQ in 2016, boasting sales exceeding 100 billion KRW with its grill product ‘Jaigle’, which was a huge hit on home shopping. However, as its popularity waned, sales shrank to about 15 billion KRW last year. In response, Jaigle also suddenly announced it would enter the secondary battery business. It decided on a large-scale paid-in capital increase for this purpose. Its stock price surged 6 to 7 times following the secondary battery theme. But currently, the capital increase has been delayed for several months, and the stock price has halved.

TS Trillion, which sells the hair loss functional shampoo ‘TS Shampoo’, is no different. TS Trillion was listed on KOSDAQ in 2020 riding on TS Shampoo but fell into the red the following year. It is interpreted that the company focused only on advertisements featuring famous celebrities such as Son Heung-min, GD, and Lim Young-woong, neglecting product development. The company’s research and development (R&D) expenses account for only 0.4?0.6% of sales, while advertising expenses exceed 20%. Moreover, when hair loss became a campaign pledge during the presidential election and TS Trillion’s stock price surged abnormally, the family of CEO Jang Ki-young sold shares to realize profits. With deteriorating financial conditions, TS Trillion is currently undergoing a sale process.

‘One-hit wonder’ singers are at least remembered as pleasant memories for the public. However, ‘one-hit wonder’ listed companies that manipulate stock prices by riding themes leave an indelible scar on investors. It is unacceptable to show ‘eat-and-run’ behavior by riding themes. Companies must faithfully engage in management that raises corporate value through steady innovation in their core business.