Stocks surged after being labeled as undervalued. Nearly 70% of the 10 companies listed in the Korea Exchange's first public disclosure of price-to-book ratio (PBR) stocks saw gains. Hyundai Steel jumped over 10%, while major stocks like Lotte Shopping and E-Mart also attracted buying interest.
According to the Korea Exchange, as of 12:18 PM on November 2, 102 out of 151 undervalued companies were up, accounting for 67.5% of the total. Six remained unchanged, and 43 declined. In the KOSPI, 73 out of 96 stocks rose, while in the KOSDAQ, 29 out of 55 stocks increased, showing a market disparity.
Hyundai Steel stood out with a 10.64% increase compared to the previous trading day, marking a significant rise among major undervalued stocks. Other strong performers included Mobase (up 9.07%), KC (up 8.64%), Lotte Shopping (up 7.94%), HL D&I (up 6.79%), Korea Line (up 6.58%), and E-Mart (up 5.79%).
Notably, the movements of large-cap stocks like Hyundai Steel, Lotte Shopping, and E-Mart were prominent. As of October 22, Hyundai Steel's PBR was 0.19, Lotte Shopping's was 0.17, and E-Mart's was 0.15. These companies, which have been undervalued for an extended period relative to their asset values, have garnered market attention following the disclosure.
Earlier, the Korea Exchange publicly disclosed a list of 151 undervalued companies, including 96 from the KOSPI and 55 from the KOSDAQ. These companies have remained in the lower PBR ranks for six consecutive half-years or six out of the last seven half-years.
This disclosure aims to encourage companies to analyze the reasons for their undervaluation and develop strategies to enhance corporate value, such as increasing dividends or buying back shares. The exchange plans to offer tailored consulting for these companies starting next year.
However, it remains to be seen whether the immediate stock price increases following the disclosure will lead to long-term improvements in corporate value. Factors such as actual profitability improvements and increased shareholder returns will be key variables influencing future stock trends.
* This article has been translated by AI.
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