"Even the Market Leaders Are Leaving" Unsettled KOSDAQ... "If Naver and Celltrion Had Stayed, KOSDAQ Would Have Surpassed 1,000 Long Ago" [KOSDAQ Revitalization] ②

Alteogen, the Leading KOSDAQ Stock, Set to Transfer to KOSPI
Celltrion, Kakao, Naver, and Other Major Players Have Already Moved
Major IPO Candidates Also Prefer KOSPI over KOSDAQ
Meanwhile, Marginal Companies Remain Like Zombies

As the government embarks on structural reforms of the KOSDAQ market, expectations are rising for the revitalization of KOSDAQ. Meanwhile, Alteogen, which holds the largest market capitalization on KOSDAQ, has confirmed its plan to transfer its listing to the Korea Exchange (KOSPI) and is currently preparing for the move. In recent years, leading KOSDAQ stocks have continuously left the market for KOSPI, inevitably slowing the growth of KOSDAQ. Attention is now focused on whether the government's newly announced "KOSDAQ Trust + Innovation Enhancement Plan" can prevent the exodus of blue-chip KOSDAQ companies.

According to the Korea Exchange on December 23, a total of 54 companies have transferred from KOSDAQ to KOSPI since 2000. Major companies such as Naver, Kakao, Celltrion, NCSoft, Asiana Airlines, POSCO DX, and L&F all packed up and moved from KOSDAQ to KOSPI.

Currently, Alteogen, the number one company on KOSDAQ, has also joined this trend. On December 8, Alteogen held an extraordinary shareholders' meeting and approved the "conditional delisting from KOSDAQ and approval of transfer listing to KOSPI."

As of December 22, Alteogen's market capitalization stood at 23.5158 trillion won, accounting for about 4.7% of the total KOSDAQ market cap. The transfer of Alteogen, which has been cited as a prime example of a successful technology-special listing, is particularly painful for KOSDAQ. This is because it marks the first case of a company listed through the technology-special listing system moving to KOSPI. Alteogen was listed on KOSDAQ in 2014 through this system. After eight consecutive years of losses, the company turned profitable and climbed to the top spot in market capitalization, making it a representative success story for KOSDAQ. Its market cap grew approximately 170 times in ten years, from about 140 billion won at the time of its public offering.

Not only Alteogen but also EcoPro BM, the second-largest company by market cap on KOSDAQ, cannot rule out the possibility of a transfer listing. Last year, EcoPro BM attempted to transfer its listing but withdrew its application in February this year due to poor performance. At the time, the company stated it would reapply after confirming improved business results, and with recent improvements, speculation about a renewed transfer listing is gaining traction. EcoPro BM's market cap is in the 15 trillion won range, so if both Alteogen and EcoPro BM leave, KOSDAQ's total market cap would shrink by nearly 8%.

An official from the financial investment industry commented, "As blue-chip companies enter KOSDAQ, scale up, and then move to KOSPI, KOSDAQ's image as a secondary market is becoming entrenched. The government has said it will devise measures to attract institutional investors such as pension funds to KOSDAQ, but if so many large-cap stocks leave, what companies would institutions have left to invest in on KOSDAQ?"

An official from the Korea Exchange remarked, "If Naver, Kakao, and Celltrion had remained on KOSDAQ, the index would have easily surpassed the 1,000-point mark and reached 1,200 long ago."

Even among large companies preparing for initial public offerings (IPOs), most choose to list on KOSPI rather than KOSDAQ. For example, LG CNS, which was listed on KOSPI in February this year, had long been eyed as a major candidate for KOSDAQ. Back in 2012, the Korea Exchange announced plans to actively attract top technology companies to KOSDAQ, naming LG CNS and Samsung SDS as targets. However, Samsung SDS listed on KOSPI in 2014, and LG CNS also chose KOSPI.

Lee Junseo, Professor of Business Administration at Dongguk University, stated, "KOSPI and KOSDAQ have fundamentally different reputations. The value assessed during foreign capital inflows and corporate fundraising inevitably differs. In terms of value enhancement, it is a foregone conclusion that KOSPI is 100% more advantageous than KOSDAQ, which is why companies prefer KOSPI."

While strong companies are leaving, the fact that marginal companies are not being weeded out and remain like zombies is also a problem. According to the Korea Economic Research Institute, as of the third quarter of last year, the proportion of marginal companies on KOSDAQ was 23.7%, which is 12.8 percentage points higher than KOSPI's 10.9%. While KOSPI's proportion increased by 2.5 percentage points from 2016 to the third quarter of 2024, KOSDAQ's rose by 17.1 percentage points over the same period.

There are calls for restructuring the market to prevent companies from leaving KOSDAQ. Professor Lee pointed out, "Nothing will work until the governance structure of the exchange is changed. Under the current system, KOSDAQ will remain a perpetual minor league serving as a gateway to KOSPI."

Regarding the removal of zombie companies, there are opinions that shareholder protection measures are needed. Professor Lee emphasized, "While there is talk of expelling zombie companies, there must be solutions for what will happen to their shareholders. It is essential to establish investor protection measures during the delisting process, such as enabling delisted companies to make a comeback or creating a proper platform for a secondary market."