Shinla SG, facing a delisting crisis on KOSDAQ due to insufficient market capitalization, has opted for a transfer listing to KONEX, drawing attention to potential candidates for the next KONEX transition. Companies such as Sejin T&S, Yukil C&S, and OSP are considered qualified candidates, although some firms are reportedly leaning towards remaining on KOSDAQ.
According to financial investment industry sources on September 17, Shinla SG decided on September 11 to apply for preliminary consultations for a new listing on the KONEX market. This marks the first case following the announcement by financial authorities on September 4 regarding the KONEX transfer system for companies with market capitalization shortfalls, which allows for transfers without liquidation trading.
Shinla SG was designated as a management stock on July 9 after its market capitalization fell below 20 billion won for 30 consecutive trading days. Failing to recover its status, it met the criteria for delisting on September 14, leading to a trading suspension starting September 15. If it passes the KONEX listing review, it will be the first company to transition from KOSDAQ to KONEX without liquidation trading due to market capitalization shortfalls.
Several candidates are emerging to follow in Shinla SG's footsteps. A recent analysis by financial authorities on September 26 identified 97 KOSDAQ-listed companies with market capitalizations below 20 billion won, estimating that 43 of them meet the financial requirements for a KONEX transfer. These include companies that have reported operating profits in two of the last three fiscal years or have maintained equity of over 20 billion won while posting an operating profit in at least one of the last three fiscal years.
Sejin T&S, Yukil C&S, and OSP are among those meeting these criteria. Notably, Sejin T&S and Yukil C&S were designated as management stocks on July 21 after their market capitalizations fell below the threshold for 30 consecutive trading days. According to the Korea Exchange, as of September 16, both companies have been under management designation for 41 trading days, with only 14 trading days of maintaining a market capitalization above 20 billion won.
Companies designated as management stocks must maintain a market capitalization above 20 billion won for 45 consecutive trading days within 90 trading days of designation to avoid delisting. If Sejin T&S and Yukil C&S remain below the threshold for five consecutive trading days after the 46th trading day of their designation, they may face delisting.
However, not all companies that meet the transfer criteria are opting for KONEX. Sejin T&S has stated it is focusing on remaining on KOSDAQ rather than considering a KONEX transfer. OSP is also leaning towards maintaining its KOSDAQ listing. On September 9, Y2K Partners, a major shareholder with over 10% stake in OSP, purchased 8,815 common shares on the market, increasing its ownership from 20.01% to 20.08%.
Yukil C&S is also undergoing capital expansion and restructuring. On September 3, the company raised approximately 3 billion won through a third-party allocation of new shares. A new major shareholder acquired 1,999,999 common shares at 1,500 won per share, securing a 13.02% stake.
A temporary shareholders' meeting is scheduled for October 1, where Yukil C&S will propose amendments to its articles of incorporation and the appointment of three internal directors, one independent director, and one auditor. The company recently announced a shift in its core business focus from tempered glass to an education technology and artificial intelligence platform, following the sale of its production subsidiary in Vietnam and its stake in C&A.
If Shinla SG successfully passes the KONEX transfer listing review, it will establish a new pathway for KOSDAQ companies that fail to meet market capitalization standards to maintain their listing status instead of transitioning to unlisted status. Meanwhile, with companies like Sejin T&S and OSP choosing to remain on KOSDAQ, the identity of the next 'KONEX transfer candidate' after Shinla SG remains a point of interest.
* This article has been translated by AI.
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