Korea will publish a list of the listed companies whose shares stay cheapest against book value, and the first one is due on November 2
A draft published in Seoul on Tuesday sets out exactly how a Korean listed company gets named in public for being cheap.
The Financial Services Commission and the Korea Exchange released detailed standards on July 28 for what the Commission calls listing up and, in the same English release, naming and shaming. Companies will be ranked by price-to-book ratio, highest to lowest, within 11 key economic sectors and sub-industry groups under the Global Industry Classification Standard. The ranking runs twice a year, on the first trading day of May and of November. A KOSPI company that lands in the bottom 25 percent of its group six consecutive times, which is three straight years, goes on the published list, and for a KOSDAQ company the cut is the bottom 10 percent.
There is a way off the list, and it expires. A company that discloses a corporate value enhancement plan, including specific measures to improve its price-to-book ratio, stays off for a year, meaning two rankings. That stops working after six years at the bottom. Twelve consecutive rankings in the bottom quartile, or bottom decile on the KOSDAQ, and the plan no longer buys an exemption.
The exchange ran a simulation against May 2026 data to size the thing. It puts the first list at between 120 and 220 companies: 80 from the KOSPI and 40 from the KOSDAQ at the low end, 130 and 90 at the high end.
Publication is not confined to a web page nobody opens. The list goes on the exchange disclosure site at kind.krx.co.kr, and the shares on it are to carry a low price-to-book tag inside the home and mobile trading systems that individual securities firms provide. The exchange says it will offer advisory and consultation services to the companies named. The Commission and the exchange add that they will consider factoring price-to-book ratio into the delisting review process and into the stewardship code guidelines for institutional investors, which is the sentence in the release with the most potential consequence and the least detail.
None of this is final. A revision to the exchange rules is due out for comment from August 5 to August 24, followed by an approval process in September. First publication is expected on November 2 this year.
The timing is coincidence and worth saying so. The draft belongs to a package of capital markets measures introduced in March, aimed at the long-standing discount on Korean equities rather than at anything happening this week, and it landed on the morning the KOSPI fell more than 10 percent on chip shares. Nothing in the document responds to that.
