Market Cap of 'Gisul Teukrye' Listed Companies Up 1.8 Times... What About Stock Returns?

Special Purpose Acquisition Companies on KOSDAQ Market Account for 10.7%
Average Revenue Growth Rate of Special Purpose Acquisition Companies 25%
Exceeding Average Growth Rate of General Listings by 10%

[Asia Economy Reporter Ji Yeon-jin] Companies debuting on the stock market through the 'technology special case' have been recognized with valuations 1.8 times higher than those of general listed companies. The technology special case listing is a system introduced in 2005 that allows companies with excellent technological capabilities and growth potential, but lacking the stable financial performance required for general listings, to be listed. As of this month, the proportion of technology special case listed companies in the KOSDAQ market has increased to 10.7%.

According to a report published on the 28th by Hanwha Investment & Securities Research Center, based on companies listed since 2005, the median total assets in the year before listing were 17.3 billion KRW for special case listed companies and 37.2 billion KRW for general listed companies, meaning special case companies had about half the assets of general companies.

However, the market capitalization of special case listed companies was 1.8 times that of general listed companies. Kim Su-yeon, a researcher at Hanwha Investment & Securities, explained, "Although special case listed companies have smaller assets financially compared to general listed companies, they receive higher valuations in the stock market," adding, "This appears to be due to the growth potential of special case listed companies."

In fact, general listed companies showed an average sales growth rate of 57% in their first year after listing, but this sharply declined to 11% in the third year and 5% in the fourth year. In contrast, special case listed companies maintained double-digit growth rates with sales growth rates of 17% in the first year, 18% in the second year, 25% in the third year, and 17% in the fourth year, steadily expanding their scale. Since 2005, the average sales growth rate of special case listed companies was 25%, while that of general listed companies was 10%.

Stock returns were similar. Analyzing companies listed since 2005 that have passed five years since listing, the returns compared to the initial public offering price for special case listed companies were 52% at year three, 106% at year five, and 82% currently, whereas general listed companies had returns of 29%, 45%, and 82% respectively during the same periods. However, researcher Kim noted, "Stock price volatility is higher for special case listed companies than for general listed companies," explaining, "This is likely because many special case listings are biotech companies, whose stock prices are sensitive to news such as clinical trial or license deal successes or failures."

Although special case listed companies are known to be financially vulnerable, their risk levels were similar to those of general listed companies. Both groups had a management item ratio below 4%.

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