Retail investors have driven up the stock prices of Monami and Hansung Enterprises, two well-known brands in South Korea, in a bid to prevent their delisting from the KOSDAQ market. This surge comes as the Korea Exchange has significantly tightened its listing maintenance criteria, leading to increased concerns about companies falling below the market capitalization threshold.
Within just two weeks of the new regulations taking effect, nine companies issued warnings about being designated as management items due to insufficient market capitalization, with five of them officially classified as such. Starting next month, companies with stock prices below 1,000 won will also face management item designations.
In response, companies on the brink of delisting have attempted to defend their stock prices through share buybacks, capital increases, and asset sales. However, the market has seen volatile price fluctuations as selling pressure from delisting fears mixed with buying interest from those hoping to maintain listings.
Interestingly, a paradoxical trend has emerged where individual investors are rallying to support long-familiar brands like Monami and Hansung Enterprises. This movement aims to boost their market capitalization above the delisting threshold. Some market observers describe this as a display of “patriotism” to protect South Korea's representative brands, while others view it as a form of self-defense against losses and a speculative gamble.
Lee Jeong-hwan, a professor at Hanyang University’s Department of Economics and Finance, noted, “While there may be a genuine desire to save these companies, ultimately, investors are acting to minimize their losses. The term ‘support buying’ alone does not adequately explain this phenomenon.”
Initially, the market anticipated that the stricter listing maintenance criteria would further dampen investor sentiment toward struggling companies. However, some individual investors have actively purchased shares of firms facing delisting, defying expectations.
One notable example is Hansung Enterprises, known for its crabmeat products, which saw its market capitalization drop to 28.7 billion won due to rising raw material costs and declining profitability, falling below the new listing maintenance standard of 30 billion won. However, the stock price surged from 4,635 won on July 6 to 8,460 won by July 10, nearly doubling in about a week. The stock hit its daily limit on July 9 and 10, and as of 2:40 PM on July 14, it was trading at 10,730 won, up 26.83% from the previous day, nearing its upper limit of 10,990 won.
The turnaround was not driven by financial performance or restructuring but rather by a social media campaign highlighting Hansung Enterprises’ charitable activities, including hosting concerts for Korean War veterans for nearly 25 years. This sparked a consensus that “such companies should not disappear,” leading to a rapid influx of retail investors, boosting its market capitalization to 52.5 billion won, surpassing the delisting threshold.
A similar trend occurred with Monami, a popular pen brand in South Korea. Monami’s stock price jumped 62% from 1,318 won on July 6 to 2,145 won within a week. After nearing its daily limit, the stock continued to rise, reaching 2,510 won by 2:41 PM on July 14, up 17.02% from the previous trading day, and peaking at 2,780 won during the session. Its market capitalization increased from 24.9 billion won to 40.5 billion won, alleviating delisting concerns.
Lee, a 36-year-old IT professional with experience studying in the U.S., shared, “I rarely go to stationery stores these days, but I recently bought a Monami three-color pen set online. It’s affordable and has a great writing feel, so I’ve always trusted it. I even brought Monami pens with me when I was in the U.S.”
This affection for the brands was echoed in online investment communities, with comments like “a brand that has been with us for a long time” and “a company that must not disappear.”
Hansung Enterprises expressed gratitude on its website on July 7, stating, “We appreciate the positive feedback and support we have received online and on social media. Since our first voyage in 1963, we have strived to produce ‘good food.’”
Monami President Song Jae-hwa also expressed gratitude in a handwritten statement posted on the company’s official Instagram on July 10, saying, “Your support during this difficult time, when delisting was a possibility, has been a great source of strength. Monami, which has been part of South Korea’s history, will continue to stand strong by your side.”
As stock prices soared, discussions around “support buying” heated up in online investment forums. One post stated, “Monami is a patriotic company. Let’s push it to 10,000 won by Liberation Day,” while another investor praised it as “a good company that also pays dividends.”
However, skepticism remains. One investor pointed out, “There are limits to propping up stock prices using patriotism.” Another cautioned, “Delisting does not mean the company will disappear. Buy the products, not the stocks.”
Another investor remarked, “Regardless of patriotism, I need to survive first,” reflecting the complex psychology of investors.
This phenomenon recalls the 2019 “No Japan” movement, during which the stock price of Monami surged by 29.88% to close at 3,325 won on July 4, 2019, amid a boycott of Japanese products. The expectation was that domestic product consumption would increase. The following day, shares of Shinseong Trading, which operates the domestic clothing brand Topten, also surged by 26.6% due to anticipated benefits from Uniqlo’s decline.
However, this rally differs from the past as it is driven more by the psychology of defending against delisting rather than actual performance. Professor Lee emphasized the need to reassess current regulations, stating, “If a market capitalization of 30 billion won can exempt a company from delisting, similar phenomena may recur, necessitating a more refined regulatory framework.”
Conversely, Professor Yang Jun-seok of Catholic University highlighted the investors’ expectations, noting, “Those investing in such companies often hope that someone will acquire the company or that the government will provide support at the last moment. Even if that doesn’t happen, they often judge that the stock price has already fallen to a point where additional losses will not be significant, leading them to take risks.”
Professor Yang compared this situation to the 2021 GameStop incident in the U.S., where retail investors on the Reddit forum WallStreetBets began buying shares to counteract hedge funds betting against the stock, leading to a massive price surge.
Both cases illustrate how collective investor psychology can drive stock prices more than a company’s performance or intrinsic value. Professor Yang noted, “This is not so much normal investing as it is a strong reaction against short-sellers.”
Online, some voices have taken a self-deprecating view of the situation, with one post stating, “While the world talks about AI, the Korean stock market is focused on crab meat and pen stocks,” highlighting the reality of the current market.
Whether this “support buying” represents true patriotic investment or another form of speculation remains a topic of debate. For now, both Monami and Hansung Enterprises have alleviated their delisting risks, but it remains uncertain whether they can maintain their upward momentum once investor interest wanes.
* This article has been translated by AI.
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