Despite the implementation of stricter delisting criteria, a significant number of companies remain at risk in the KOSDAQ market. As of October 2, there are 118 companies with a market capitalization below the current threshold of 20 billion won, and 82 stocks classified as penny stocks, trading below 1,000 won.
According to the Korea Exchange, as of October 2, 62 of these companies are classified as management issues under the exchange's criteria. This means that more than half of the companies with a market cap below 20 billion won are already under scrutiny.
However, not all companies with a market cap below 20 billion won are immediately at risk of delisting. Current regulations state that a company must fall below the market cap threshold for 30 consecutive trading days to be designated as a management issue, and must then fail to meet recovery criteria during the given period to face delisting.
Nonetheless, with over 100 companies currently below the threshold, it is likely that additional management designations will continue for the foreseeable future.
In terms of stock prices, the situation is similarly concerning. As of October 2, there are 82 companies in the KOSDAQ with stock prices below 1,000 won, of which 56 are classified as management issues.
There are also 40 companies that are simultaneously vulnerable under both market cap and stock price criteria. As of October 2, 40 KOSDAQ companies have a market cap below 20 billion won and stock prices below 1,000 won, with 31 of these already designated as management issues.
It is important to note that a stock's price alone does not determine its delisting status. A stock must trade below 1,000 won for 30 consecutive trading days to be classified as a management issue, and must then fail to meet established recovery criteria for delisting procedures to commence.
The challenge lies in the fact that the number of companies at risk remains high, while the threshold for delisting is set to increase. Financial authorities initially planned to raise the KOSDAQ market cap maintenance threshold from 20 billion won to 30 billion won starting in January 2027. However, this has been postponed to July 2027 to consider market conditions and the burden on companies.
This extension provides companies with additional time, but many stocks are still at risk of falling under the new criteria. As of October 2, there are 219 KOSDAQ companies that currently meet the existing maintenance criteria but have market caps below 30 billion won.
If the current market cap levels persist until July 2027, these companies will also fall under the potential impact of the new market cap criteria.
Combining the 118 companies with market caps below 20 billion won and the 219 companies with market caps between 20 billion and 30 billion won, there are a total of 337 KOSDAQ companies with market caps below 30 billion won as of October 2.
However, this does not mean that all 337 are candidates for delisting. Before the criteria are applied, companies may increase their market caps through stock price increases, improved performance, or capital increases, and the process for actual management designation requires a 30-day consecutive failure to meet the criteria.
The KOSPI also has companies that fall under the potential impact of the new criteria. The current KOSPI market cap maintenance threshold is 30 billion won, but it will increase to 50 billion won in July 2027.
As of October 2, there are four companies with market caps between 30 billion and 50 billion won: Woosung Materials at 49.3 billion won, Woojin Plaimm at 39.1 billion won, Seou Global at 34.2 billion won, and Woojin INS at 31.9 billion won.
While the additional criteria have been postponed for six months, the delisting procedures based on the current market cap of 20 billion won and stock price of 1,000 won continue. Since July, three companies—Koiz, Wonpung Mulsan, and Susung Webtoon—have already been delisted due to market cap failures.
New companies are also entering the risk category. In September, companies such as Pine Tech, KS Industry, SJ Group, Genitics, Hanju ART, Gukyoung G&M, and From Bio were designated as management issues due to market cap failures. In October, EnGen Bio was designated for market cap failure, and Benoti & Al was designated for stock price failure.
A financial industry official stated, "There is a high likelihood that delisting cases will continue to emerge under the strengthened criteria. Timely removal of underperforming companies from the market and improving the overall quality of listed companies are essential for enhancing trust in the domestic stock market and ultimately addressing the Korea discount in the long term."
* This article has been translated by AI.
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