Konex Association: "Companies Previously Listed on Konex Have High Potential"

Previously Listed Companies Show Relatively Low IPO Prices Indicating Undervaluation
Research Team: "KONEX Plays a Role in Reducing Information Asymmetry Among Investors"

KONEX CI

[Asia Economy Reporter Gong Byung-sun] A study has found that companies that transfer their listing from KONEX to KOSDAQ have higher growth potential and lower information asymmetry among investors compared to companies that directly list on KOSDAQ.

On the 8th, the KONEX Association announced the results of a study titled "The Role of Resolving Information Asymmetry Among Investors in the KONEX Market." The study, commissioned to Professor Shin Hyun-han's research team at Yonsei University Business School, was conducted over two months from September 14 to November 15 last year.

The research team explained that companies that transferred their listing from the KONEX market, which opened in 2013, to the KOSDAQ market, although smaller in size, allocate more capital to research and development than companies that directly list on KOSDAQ. In fact, when analyzing long-term stock returns by listing route using Buy-and-Hold Abnormal Returns (BHAR), the long-term stock returns of transferred companies were higher than those of directly listed companies. BHAR refers to the excess returns generated by purchasing a stock at a specific point and holding it for a certain period.

Information asymmetry among investors was also relatively lower for transferred companies. Analyzing short-term (same day, 3 trading days, 5 trading days) stock returns showed that transferred companies exhibited comparatively lower levels of IPO underpricing. IPO underpricing is known as an indicator of information asymmetry.

The research team commented on this analysis, stating, "The KONEX market appears to play an effective role in resolving information asymmetry among investors, contributing to the creation of a healthy investment environment," and added, "It is necessary to continuously develop the transfer listing route through the KONEX market as an alternative to direct listing in the future."

In response, Kim Hwan-sik, president of the KONEX Association, said, "This study provides meaningful analysis regarding the development direction of the KONEX market," and expressed hope that "the significance of the KONEX market will be enhanced and utilized to promote market revitalization."

This content was produced with the assistance of AI translation services.