'Even the Blue Chips Are Leaving' Unsettled Market... "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. Over the years, leading KOSDAQ-listed companies have successively left the KOSDAQ market for the Korea Exchange, inevitably slowing KOSDAQ's growth. Attention is now focused on whether the government's recently announced 'KOSDAQ Trust + Innovation Enhancement Plan' can prevent the exodus of top-tier KOSDAQ companies.

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

Currently, Alteogen, the No. 1 company on KOSDAQ by market capitalization, has joined this trend. On December 8, Alteogen held an extraordinary general meeting of shareholders and passed an agenda item approving the 'conditional delisting from KOSDAQ and transfer listing to the Korea Exchange.'

As of December 22, Alteogen's market capitalization stood at 23.5158 trillion won, accounting for about 4.7% of the entire KOSDAQ market. Particularly, the departure of Alteogen, which has been cited as a representative success story of the technology-special listing system, is a painful blow to the KOSDAQ market. This is because Alteogen is the first company listed through the technology-special listing system to transfer to the Korea Exchange. Alteogen was listed on KOSDAQ in 2014 via the technology-special listing system. After eight years of losses, the company turned profitable and rose to the top spot in market capitalization, making it a flagship success story for KOSDAQ. Its market capitalization grew about 170-fold in 10 years, from around 140 billion won at the time of its initial public offering.

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

An official from the financial investment industry commented, "As leading KOSDAQ companies scale up within the market and then move to the Korea Exchange, the image of KOSDAQ as a secondary market is becoming entrenched. The government has announced plans 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?"

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

Even for large companies preparing for initial public offerings (IPOs), most choose to list on the Korea Exchange rather than KOSDAQ. For example, LG CNS, which was listed on the Korea Exchange in February this year, had long been a highly anticipated candidate for KOSDAQ. In 2012, the Korea Exchange announced its intention to actively attract leading technology companies to KOSDAQ, mentioning LG CNS and Samsung SDS as targets. However, Samsung SDS listed on the Korea Exchange in 2014, and LG CNS also chose the Korea Exchange.

Lee Junseo, Professor of Business Administration at Dongguk University, said, "KOSPI and KOSDAQ have fundamentally different reputations. The value assessed for foreign capital inflows and corporate fundraising is inevitably different. It is an established fact that KOSPI is more advantageous than KOSDAQ in terms of value enhancement, which is why companies prefer KOSPI over KOSDAQ."

While good companies are leaving, the fact that marginal companies are not being weeded out and remain like zombies is also a problem. According to the Federation of Korean Industries, as of the third quarter of last year, the proportion of marginal companies on KOSDAQ was 23.7%, 12.8 percentage points higher than the 10.9% on the Korea Exchange. From 2016 to the third quarter of 2024, the proportion increased by 2.5 percentage points in the Korea Exchange, but by 17.1 percentage points in KOSDAQ over the same period.

There are suggestions that restructuring of the market structure is necessary to prevent companies from leaving KOSDAQ. Professor Lee stated, "Until the governance structure of the Korea Exchange changes, nothing will work. Under the current system, KOSDAQ is destined to remain a perpetual minor league serving as a stepping stone to KOSPI."

Regarding the expulsion of zombie companies, there is also a need to establish mechanisms to protect shareholders. Professor Lee emphasized, "While there is talk of expelling zombie companies, there needs to be a solution for what happens to their shareholders. Measures must be put in place to protect investors during the expulsion process, such as creating platforms for secondary markets to function properly or enabling expelled companies to recover."