139 KOSDAQ-listed companies fell below the 200 billion won market capitalization threshold as of the previous day, placing them in delisting review territory according to Korea Exchange data released on the 21st. This represents a 10.32% increase from 126 companies one month prior, with affected minority shareholders rising 18.59% from 1.31 million to 1.56 million based on recent year business reports. The KOSDAQ index declined 25.11% during the same period, dropping from an April intraday high of 1229.42 to the current 700 range. The broader market downturn stems from capital concentration in semiconductor large-cap stocks and prolonged Middle East conflict concerns triggering monetary tightening fears, intensifying capital outflow from the KOSDAQ market.
KOSDAQ Companies Below Market Cap Threshold Increased 10.32% in One Month
According to Korea Exchange data as of the previous day, 139 KOSDAQ-listed companies (excluding SPACs and preferred shares) recorded market capitalizations below 200 billion won. This figure increased 10.32% from 126 companies one month earlier. The number of minority shareholders impacted by this situation grew from 1.31 million to 1.56 million based on recent year business reports, marking an 18.59% increase.
KOSDAQ Index Fell 25.11% from April Peak to 700 Range
The KOSDAQ index declined 25.11% during the same comparison period, reflecting sustained market weakness. After forming an intraday high of 1229.42 in April, the index continued falling to the current 700 range. Capital concentration in semiconductor stocks combined with tightening concerns from central banks responding to Middle East conflict have accelerated capital outflow from the KOSDAQ market.
Daily Trading Volume Collapsed from 14.9 Trillion Won to 6.79 Trillion Won
KOSDAQ market trading volume dried up significantly, averaging 6.79 trillion won per day this month compared to 14.9 trillion won at the beginning of the year — approximately half the initial level. Trading volume decreased more rapidly after single-stock leveraged products for Samsung Electronics and SK Hynix launched at the end of May. Monthly average trading volume stood at 15 trillion won in May, dropped to the 10 trillion won range in June, and fell to the 6 trillion won range this month.
Finetech and Woojin B&G Show Profit Growth Despite Low Market Caps
Some companies face delisting risk despite improving fundamentals unrelated to their operational strength. Display components and secondary battery equipment company Finetech recorded an operating loss of 8.7 billion won in 2023, turned profitable with 600 million won in 2024, and expanded profits to 1.9 billion won in the recent year. However, its market capitalization remains below 200 billion won, meeting delisting criteria.
Animal pharmaceutical company Woojin B&G similarly posted an operating loss of 700 million won in 2023, achieved profitability with 1.1 billion won in 2024, and doubled profits to 2.2 billion won in the recent year. Despite this performance, its market capitalization stands in the 170 billion won range, placing it under delisting review.
Korea Exchange Applies Strengthened Delisting Rules from This Month
Korea Exchange implemented strengthened delisting requirements starting this month to improve KOSDAQ market quality. KOSDAQ-listed companies become subject to delisting review if their market capitalization falls below 200 billion won. Companies maintaining market caps below 200 billion won for 30 consecutive trading days receive watchlist designation. If they fail to exceed this threshold for 45 consecutive trading days within a subsequent 90-trading-day period, they face delisting without exception.
NASDAQ SEC Proposed $5 Million Minimum Market Cap with 180-Day Exception Revision
According to the U.S. Securities and Exchange Commission, NASDAQ proposed introducing regulations in January requiring listed companies to maintain market capitalizations above $5 million (approximately 7.5 billion won), with immediate delisting for non-compliance without grace periods.
However, NASDAQ prepared amended regulations last month allowing some grace periods. The revision permits the Listing Qualifications Hearing Panel to grant exceptions not exceeding 180 days for companies receiving delisting notices due to market cap deficiencies, if the panel deems it appropriate. This measure reflects concerns that corporate valuations may temporarily decline due to market shocks regardless of company growth potential and financial soundness.
Industry Calls for Revising Formal Delisting Criteria to Include Qualitative Review
Industry voices advocate for supplementary measures including exceptions for quality companies as KOSDAQ market marginalization continues. One industry official stated, "Problems can arise when companies face delisting due to external factors causing market cap declines even though their business and actual value remain unchanged." The official added, "The market cap standard needs conversion from a formal delisting requirement to a substantive delisting requirement," emphasizing, "Even if market cap falls below 200 billion won, procedures examining whether the company actually remains suitable for the KOSDAQ market should be included."
FAQ
How many KOSDAQ companies currently face delisting risk due to low market capitalization?
139 KOSDAQ-listed companies (excluding SPACs and preferred shares) recorded market capitalizations below 200 billion won as of the previous day according to Korea Exchange data released on the 21st, representing a 10.32% increase from 126 companies one month earlier.
What are the new KOSDAQ delisting rules implemented this month?
Under strengthened rules applied from this month, KOSDAQ companies with market caps below 200 billion won for 30 consecutive trading days receive watchlist designation. If they fail to maintain market caps above 200 billion won for 45 consecutive trading days within a subsequent 90-trading-day period, they face delisting without exception.
How did NASDAQ revise its proposed minimum market cap delisting rules?
NASDAQ prepared amended regulations last month allowing the Listing Qualifications Hearing Panel to grant exceptions not exceeding 180 days for companies receiving delisting notices due to market cap deficiencies below $5 million, if deemed appropriate based on company growth potential and financial soundness.
