Last Year, 102 Listed Companies Announced Value-Up Disclosures... Over 41% Participation Based on Market Capitalization

The Korea Exchange announced on the 9th that a total of 102 listed companies conducted value-up main disclosures and preliminary disclosures by the end of last year. Companies participating in value-up disclosures accounted for more than 41% of the KOSPI market capitalization.

Korea Exchange, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

According to the Exchange, 102 listed companies made value-up disclosures (including main and preliminary disclosures) by the end of last year. Among them, 85 companies were on the KOSPI and 17 on the KOSDAQ, indicating low participation in value-up disclosures by KOSDAQ companies compared to KOSPI companies.

With value-up disclosures led mainly by large companies, the proportion of companies with a market capitalization of over 1 trillion KRW reached 63% (64 companies), and in the case of KOSPI, listed companies accounting for 41% of the market capitalization completed value-up disclosures. For KOSDAQ, the market capitalization proportion of companies participating in value-up disclosures was 2%.

Additionally, the Exchange stated that since the implementation of the value-up program last year, interest in respecting shareholder value has significantly increased, with the scale of share repurchases reaching approximately 18.8 trillion KRW. The scale of share repurchases increased by more than 10 trillion KRW from 8.2 trillion KRW in 2023, reaching about 2.3 times the previous amount. This is the highest level since related data has been available in the Exchange system since 2009.

The scale of treasury stock cancellations also increased 2.9 times from 4.8 trillion KRW in 2023 to 13.9 trillion KRW last year. This is the largest scale since 2017, when Samsung Electronics conducted a large-scale treasury stock cancellation. Cash dividends also expanded to 45.8 trillion KRW, a 6.3% increase compared to 2023.

Initially, the proportion of financial sectors with low price-to-book ratios (PBR) was high, but participation from various sectors such as capital goods has since expanded.

As of the end of last year, the participation proportions in value-up disclosures by industry were 22% for capital goods (based on GICS industry classification), 19% for banks and financial services, and 8% for consumer discretionary retail and materials, in that order.

According to the Exchange, companies established corporate value enhancement plans in the order of ▲enhancing shareholder returns (89%, overlapping counts) ▲improving capital efficiency (73%) ▲improving growth potential (49%) ▲improving market evaluation (31%).

With expectations from the value-up policy flowing into the market since the beginning of the year, the stock returns of companies participating in value-up also performed well. The average return of companies with value-up main disclosures compared to the beginning of the year was 3.2%.

In particular, the stock price of KOSPI main disclosure companies rose by an average of 4.9% compared to the beginning of the year, exceeding the KOSPI return (-9.6%) by about 15 percentage points. Although the stock return of KOSDAQ main disclosure companies was -9.4%, it outperformed the KOSDAQ return (-21.7%) by about 12 percentage points.

The Exchange stated that it plans to continue various support measures to encourage corporate participation in the second year of the value-up program this year.

First, during the first quarter, the Exchange will establish evaluation criteria for the Value-Up Excellent Company Award and present the 'Value-Up Excellent Company Award' in May. Awarded companies will receive incentives such as preferential selection as exemplary taxpayers, five types of tax administration support including tax fast-track, additional points during periodic designated audit exemption reviews, consideration of mitigation reasons during supervisory sanctions, exemption from Exchange annual fees, and priority participation opportunities in Exchange joint investor relations (IR) events. The Exchange also plans to publish a value-up program white paper to share excellent disclosure cases, disclosure participation status, and key feature analyses.

In June, a regular revision of the value-up index is scheduled, and throughout the year, the Exchange will continue to support investment expansion in value-up disclosure companies through domestic and international promotion of the value-up program and joint IR events for excellent companies.

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