KOSDAQ Market Cap Shift Triggered by HLB

HLB Hits Lower Limit Two Days in a Row, Market Cap Halved
Alteogen's Stock Rises on MSCI Index Inclusion... Ranks 3rd
Gap Between 4th Place HLB and 5th Place Enchem Only 280 Billion Won

HLB has recorded the lower limit price for two consecutive days, causing a significant shift in the KOSDAQ market capitalization rankings. Whether the reshuffling of market cap positions continues will depend on HLB's stock price movements.

According to the Korea Exchange on the 21st, HLB hit the lower limit price again on the 20th following the 17th, dropping its stock price to the 40,000 KRW range. The stock price, which was 95,800 KRW on the 16th, was halved after two consecutive days of hitting the lower limit. Market capitalization also plunged sharply from the 12 trillion KRW level to the 6 trillion KRW level.

As HLB's market cap significantly decreased, the rankings among the top market cap companies also changed. Just a week ago, HLB was ranked 2nd in market cap but fell to 4th, while EcoPro, which had been competing with HLB for 2nd place, took the 2nd spot. Alteogen, which succeeded in being included in the Morgan Stanley Capital International (MSCI) Korea Index, recently showed strong stock performance and secured 3rd place.

Since last month, there have been frequent changes in the top KOSDAQ market cap rankings centered around HLB. Originally, EcoPro, which was 2nd, had its trading suspended from the 9th to the 24th of last month due to a stock split, during which HLB rose to 2nd place. After EcoPro resumed trading and seemed to reclaim 2nd place, HLB retook the position, igniting a fierce competition for 2nd place. In this context, HLB's stock price plunged following news of the failure to obtain U.S. Food and Drug Administration (FDA) approval for its liver cancer drug, pushing it down to 4th place. In May last year, HLB applied for FDA approval of a new drug for first-line treatment of liver cancer combining 'Rivoceranib' and Camrelizumab, an immune anticancer drug from China's Hansoh Pharmaceutical. If HLB's liver cancer drug had received FDA approval, it would have been the first case of a cancer treatment developed by a domestic company gaining FDA approval, raising expectations. However, on the 17th, the FDA sent HLB a Complete Response Letter (CRL), effectively halting the new drug approval.

On the other hand, Alteogen rose to 3rd place with continued strong stock performance following its inclusion in the MSCI index. Alteogen's stock price recovered to the 190,000 KRW level after four consecutive days of gains. According to the May regular review results announced by MSCI, a global stock index provider, on the 15th, three stocks including Alteogen, Enchem, and HD Hyundai Electric were newly included in the MSCI Korea Index.

If HLB's stock price decline continues, changes in market cap rankings are expected to persist. The market cap gap between 4th place HLB and 5th place Enchem sharply narrowed from 3.2 trillion KRW on the 17th to 279.7 billion KRW on the 20th.

The sharp drop in HLB, a top market cap stock, is also weighing on the KOSDAQ index. Besides HLB, HLB Group companies listed on KOSDAQ, HLB Pharmaceutical and HLB Life Science, fell 27.31% and 13.87%, respectively, on the 20th. While the KOSPI rose 0.64% on the 20th, the KOSDAQ fell 0.93%. On the 17th, both KOSPI and KOSDAQ recorded declines of over 1%, with the KOSDAQ's drop being larger. The KOSDAQ has fallen for two consecutive days, dropping to the 840 level for the first time in about a month.