[Featured Stock] Kumyang Plummets Amid Earnings Decline and Incomplete Disclosures...

As of 9:30 AM on the 4th, Kumyang's stock price is trading at 18,080 KRW, down 19.64% compared to the previous day's closing price. This appears to be due to concerns over designation as a management stock following poor performance last year and issues related to non-compliant disclosures.

On the 28th of last month, Kumyang announced its preliminary financial results for last year based on consolidated financial statements, reporting sales of 153.7 billion KRW and an operating loss of 54.5 billion KRW. While sales slightly increased by 1.1% compared to the previous year, the operating loss significantly expanded from 14.6 billion KRW in 2023. The net loss also surged from 60.4 billion KRW to 199.8 billion KRW. The company attributed the increased losses to "cost increases due to large-scale facility investments for new business initiatives, reflection of valuation losses of subsidiaries, and increased corporate tax expenses from disposal of treasury stock."

Earlier this morning, a media outlet pointed out concerns over Kumyang’s potential designation as a management stock due to accumulated penalty points from violations of disclosure obligations.

In October last year, Kumyang received 10 penalty points for violating disclosure obligations related to a Mongolian mining development project. Previously, in September last year, Kumyang announced a plan for a paid-in capital increase but withdrew the plan in January this year after the Financial Supervisory Service cited inadequacies in the securities registration statement, effectively reversing the disclosure. The securities industry expects that if the Korea Exchange designates Kumyang as a non-compliant disclosure corporation due to this reversal, Kumyang will receive an additional 5 penalty points.

According to the disclosure regulations of the Korea Stock Exchange, if penalty points for disclosure violations reach 15 or more, the company is designated as a management stock. If designated, the company will be automatically removed from the KOSPI 200 and may face a temporary trading suspension.

Uncertainty around Kumyang’s stock price is expected to continue until the Korea Exchange’s Listing Disclosure Committee makes a decision on whether to designate the company as a non-compliant disclosure corporation.