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The Korea Exchange has designated 36 listed companies — sub-1,000-won "penny stocks" and low-market-cap firms — as administrative issues. This marks the first application of tightened delisting criteria, in effect since last month, targeting stocks whose price has stayed below 1,000 won for 30 consecutive trading days or whose market cap has fallen short of 30 billion won on the KOSPI or 20 billion won on KOSDAQ. With the system for timely removal of insolvent and marginal companies now actually in operation, these stocks will face delisting proceedings if they fail to meet the threshold for 45 consecutive trading days within a 90-trading-day window after being designated.

According to the Korea Exchange on the 12th, a total of 36 companies were designated as administrative issues — 9 on the KOSPI and 27 on KOSDAQ. Of these, 30 are newly designated, while the remaining 6 already held administrative issue status and had a price-shortfall reason added.

This marks the first case where the tightened delisting standards, in effect since July 1, have been applied. Financial authorities and the exchange strengthened the delisting system to address concerns that insolvent companies remaining on the stock market for extended periods undermine market trust and the efficient allocation of capital. In particular, they introduced delisting criteria for stocks trading below 1,000 won and decided to gradually raise market-cap thresholds.

On the KOSPI, nine stocks were affected. Daeyoung Packaging, Elite Beauty, and Ilshin Stone fell short on price; SUN&L, Korea Electric Terminal Holdings, Taewon Mulsan, Daewon Chemical, and Namsung fell short of the 30-billion-won market cap threshold; and Ontide fell short on both counts.

On KOSDAQ, 27 stocks triggered designation. Fifteen companies fell short on price: Wooriee Enterprise, TKG Aegang, CMG Pharma, Chaperone, Good People, JMI, SDN, Omnisystem, Innoinstrument, East Aid, Noul, S-Energy, LabGenomics, New Intek, and Abion.

Four companies fell short of the 20-billion-won market cap threshold: Kukil Sindong, Hantop, Fashion Platform, and S&W. Hyungji Global and E8 fell short on both price and market cap. Six companies that already held administrative issue status — BK Holdings, iCream Edu, Wonpung Mulsan, Barunson E&A, Suseong Webtoon, and AFW — had a price-shortfall reason added to their existing designation.

Administrative issue designation is the stage before delisting. Companies designated for falling short on price or market cap are then evaluated over the following 90 trading days to see whether they recover. To avoid delisting, they must maintain a price of 1,000 won or above, or meet the applicable market-cap threshold, for 45 consecutive trading days during that period. Companies that fail to meet the threshold become subject to delisting.

The criteria for avoiding delisting have also been tightened compared to before. In particular, for market-cap shortfall cases, companies previously could avoid delisting by meeting the threshold for 10 consecutive trading days, or a cumulative 30 days, within the 90-trading-day window — but since last month, they must now meet the threshold for 45 consecutive trading days. The change is meant to prevent companies from avoiding delisting by briefly propping up their share price.

Companies designated as administrative issues say they intend to resolve the underlying causes through improved earnings and expanded new business lines.

An iCream Edu official said, "We take the concerns of shareholders and the market seriously, and are focusing our efforts on improving operating results and financial structure to enhance corporate value and restore market trust." The company sees concerns over the education market's growth potential, driven by the declining school-age population, as weighing on its stock price, and plans to boost corporate value through improved performance and business expansion.

An official at one of the newly designated KOSDAQ companies said, "Based on the business capabilities we've built up over a long period, we will work to meet the relevant regulatory criteria through improved management efficiency and new business initiatives," adding, "We will drive a reassessment of our corporate value to meet the expectations of shareholders and the market."

                                                                                                              Park Ju-yeon