Moved to KOSPI but stock price is lackluster, why?

KOSPI Transfer Listing First Day: L&F Falls Nearly 9%
Previously Transferred POSCO DX Drops 23% After Transfer
Secondary Battery Stocks' Weakness Weighs on Prices

Since early this year, attention has been focused on the anticipated transfer listing of top KOSDAQ market capitalization stocks to the KOSPI market, but it has been found that the stock prices after the transfer fall far short of expectations. This is interpreted as due to the continued sluggishness of secondary battery stocks this year. Attention is now on whether HLB, considered the next candidate for transfer listing, can break the chain of poor stock performance after the transfer.

According to the Korea Exchange on the 30th, L&F's stock price fell nearly 9% on the first day of its transfer listing to the KOSPI market, dropping below the 150,000 won level. It is the first time in about two months that L&F's stock price has fallen below 150,000 won.

Posco DX, which previously transferred to KOSPI, has also continued a sluggish stock price trend after the transfer. On the first day of listing, the 2nd, Posco DX's stock price fell more than 6%, dropping below the 70,000 won level, and recently the stock price has been moving in the 50,000 won range. The stock price has fallen 23.32% since the transfer.

The poor stock performance of L&F and Posco DX after the transfer is interpreted as a ripple effect of the overall sluggishness of secondary battery stocks. The continued weakness of secondary battery stocks this year has acted as downward pressure on the stock market. Kim Jung-yoon, a researcher at Daishin Securities, said, "Steel, chemical, and IT home appliances, which make up the secondary battery value chain, are among the lowest in terms of returns compared to the beginning of the year," adding, "From a valuation perspective, the FnGuide Secondary Battery Industry Index's 12-month forward price-to-earnings ratio (PER) has consistently remained above 25 times since COVID-19, but since mid-last year, it has recorded a series of sharp declines, falling to 20.12 times on the 25th."

There is an analysis that stock prices are unlikely to rise solely due to the transfer listing itself. Improvement in business conditions and fundamentals is necessary. Noh Woo-ho, a researcher at Meritz Securities, said, "I take a somewhat conservative stance on the recently perceived formula 'KOSPI transfer listing = stock price increase,'" adding, "The inflow of funds after new index inclusion is considered a temporary driver of stock price increase, and ultimately, if there is no meaningful change in the secondary battery business conditions or L&F's fundamentals, it will be somewhat difficult to resolve structural undervaluation compared to competitors or maximize shareholder value." L&F has fallen about 29% this year.

The market is paying attention to whether HLB, considered the next candidate for transfer listing, can break the chain of poor stock performance seen in these transfer-listed stocks. HLB approved its transfer listing to the KOSPI market at an extraordinary general meeting of shareholders on the 21st of last month, and is expected to move as early as February or March. While the two previously transferred stocks were related to secondary batteries, HLB is a pharmaceutical and bio stock, and pharmaceutical and bio stocks have shown relatively better stock performance compared to secondary batteries this year, raising expectations that it may continue a favorable trend after listing. HLB has risen more than 24% this year. In particular, it recently surged on expectations of FDA approval for its liver cancer new drug.

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