▲ Korea Exchange
The Korea Exchange announced that it will make its first public disclosure of companies with low price-to-book ratios (PBR) on November 2.
This measure is intended to encourage listed companies facing prolonged stock undervaluation to voluntarily boost their corporate value.
The exchange stated today (the 11th) that the decision follows revisions to listing regulations and the enactment of guidelines regarding the selection of low-PBR companies.
Low-PBR companies are defined as KOSPI-listed firms whose cumulative three-year PBR, calculated by industry, falls within the bottom 25%, and KOSDAQ-listed firms within the bottom 10%.
The exchange plans to calculate PBR every semi-annual period and generally disclose companies that fall below the selection threshold for six consecutive semi-annual periods.
If a company exceeds the threshold in just one of the six semi-annual periods, the exchange will additionally check its PBR from the seventh past semi-annual period, and include it in the disclosure list if it falls below the threshold.
However, for the initial disclosure this coming November, companies whose most recent PBR exceeds the selection threshold will be excluded from the low-PBR company list.
The PBR reference date for this first disclosure is the 22nd of next month.
Companies can be exempt from disclosure for one year if they disclose a corporate value-up plan, including PBR improvement measures, up to 7 business days prior to the disclosure date.
To receive the exemption privilege in the upcoming November disclosure, companies must disclose their corporate value-up plan by the 22nd of next month.
However, companies whose PBR has ranked in the bottom 25% (KOSPI) or bottom 10% (KOSDAQ) for a cumulative six years (12 semi-annual periods) by market and industry will be subject to disclosure regardless of whether they have disclosed a corporate value-up plan.
Starting from the 14th, companies can check their own PBR for the past six semi-annual periods through the exchange's listing disclosure submission system in advance to see if they are included in the low-PBR company disclosure targets.
The exchange plans to publish low-PBR companies on its website on the first trading day of May and November each year, and display relevant tags on securities firms' mobile trading systems (MTS).
Ahead of the implementation of the system, the exchange will also hold "on-site explanatory sessions for regional listed companies to enhance corporate value" across six regions nationwide (Seoul, Gyeonggi, Gyeongbuk, Gyeongnam, Chungcheong, and Jeolla) from the 11th to the 18th.
During these sessions, disclosure officers of KOSPI and KOSDAQ listed companies will be briefed on major institutional improvements related to the corporate value-up program, and one-on-one consultations will be conducted for each company.
The exchange stated, "Moving forward, we will actively support companies corresponding to low PBR, high dividend, and special listing categories so they can understand the details of institutional improvements and prepare in advance."
(Photo: Yonhap News)
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