NSN "Escaping Management Item Issues with Exchange Regulation Relaxation"

[Asia Economy Reporter Jang Hyowon] As the Korea Exchange announced plans to reform the delisting system, NSN is expected to escape the risk of being designated as a management item.

On the 4th, the Korea Exchange announced that based on the discussions of the '3rd Financial Regulation Innovation Meeting,' it plans to convert financial-related delisting reasons to substantive review by November.

The Korea Exchange currently designates KOSDAQ-listed companies with four consecutive years of operating losses as management items and subjects companies with five consecutive years of losses to substantive delisting review. However, it plans to abolish this. This measure considers the environment such as economic recession and the COVID-19 situation rather than uniform financial figures.

The Korea Exchange explained, "The delisting system uniformly applied without considering the scale or cause of operating losses has unreasonable aspects," and added, "We will delete 'five consecutive years of operating losses' from the substantive review reasons and abolish the designation of management items due to four consecutive years of operating losses." However, from the perspective of investor protection, it added that companies with five years of operating losses will be designated as 'Investor Warning Items.'

With this measure, NSN will be able to alleviate concerns about being designated as a management item and escape from management item status. Since it has recorded operating losses since 2019, if it incurs operating losses this year as well, it was expected to be designated as a management item next year.

Since the first half of the year, NSN has been working to strengthen profitability to avoid the issue of management item designation. By fully launching its eco-friendly ESG distribution business, it has achieved monthly sales growth since the second half of the year.

An NSN official said, "If the Exchange's regulation change is finalized, we will be able to avoid designation as a management item due to four consecutive years of operating losses," and added, "However, we are focusing all efforts on strengthening profitability with the goal of turning a profit this year as planned in our existing business goals, and from next year, we plan to actively promote new businesses that can secure growth momentum."

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