'Commander' Hong Soon-wook, Vice Chairman, "KONEX Vitality to Continue Next Year"

[Asia Economy Reporter Lee Seon-ae] Despite the stock market downturn freezing the initial public offering (IPO) market, only the KONEX market is smiling alone. The number of companies entering the KONEX market this year is expected to double. On the 12th, Hong Soon-wook, Vice President of the Korea Exchange (KOSDAQ Market Headquarters), who oversees markets such as the Startup Market (KSM), KONEX, and KOSDAQ, said, "This year, institutional improvements such as lowering the listing threshold in May and active marketing led to revitalization," adding, "Next year, we will further strengthen the foundation of the improved system this year and conduct active marketing targeting venture capital (VC) and investment banks (IB) to continue the (positive) momentum."

According to the Korea Exchange, the newly listed companies in the KONEX market this year are Kostec System, Konasol, Bascan Bio Pharma, Future Medicine, TL Engineering, Talos, AI The Newtrigen, and Aha, totaling eight so far. Last year, there were seven newly listed companies in total. If six companies?Tide, GFC Life Sciences, Kai Biotech, Micro NEX, Any Medi Solution, and IO Bio?that have submitted listing applications receive approval, the number of KONEX listings this year is expected to increase to 14. Vice President Hong said, "We expect 13 KONEX listings by the end of the year and can even hope for up to 14."

KONEX was created as a bridge market for KOSDAQ listings. It serves as a significant ladder for companies that cannot list directly on KOSDAQ. The KONEX market, established in July 2013, peaked in 2016 with 50 listings but has steadily declined to 29 in 2017, 21 in 2018, 19 in 2019, and 12 in 2020. Although there have been murmurs about its identity in the market, Vice President Hong shook his head. He emphasized, "Looking at the number of companies transferring from KONEX to KOSDAQ, the original purpose has been achieved," and raised his voice, "While the entry barrier to the KOSDAQ market has lowered, increasing the number of companies going directly to KOSDAQ, there are still companies that cannot go directly and thus seek KONEX."

Nevertheless, to resolve the murmurs, he spent a relentless year. Starting early this year, aiming to revitalize the KONEX market with financial authorities, he implemented measures to lower the transfer listing threshold for KONEX-listed companies moving to KOSDAQ, focusing on incentivizing companies to list on KONEX. The existing requirement of "operating profit of 1 billion KRW and sales growth rate of 20% or more" was changed to "operating profit of 1 billion KRW and sales growth rate of 10% or more," lowering the threshold. The basic deposit system, which was an obstacle to listing, was also abolished. Benefits covering 50% of listing costs were provided. Since May, KONEX-listed companies have been receiving transfer listing consulting to equip them with internal control capabilities and infrastructure at the level of KOSDAQ-listed companies. Through this consulting, experts with rich IPO experience check the management transparency and overall business continuity of KONEX companies and offer programs that allow them to focus on preparing for KOSDAQ listing.

Meanwhile, as the KONEX market gains momentum, the Startup Market (KSM) has been receiving relatively critical views for its sluggishness. KSM, launched in November 2016, positions itself as a comprehensive incubator for moving to KOSDAQ or KONEX. Only one company has moved from KSM to KONEX or KOSDAQ so far. The only case was Pintel, an AI video analysis specialist, which listed on KOSDAQ in October this year. As KONEX's appeal declined, companies were evaluated to have less incentive to move to KONEX through KSM. However, with KONEX regaining vitality, KSM is also expected to change significantly. Vice President Hong said, "KSM is not a formal listing market; its purpose is to help companies build a foundation to grow substantially." The Korea Exchange also emphasized that it will continue efforts to support the growth of early-stage companies regardless of market activation.

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