[Anchor]
A year ago, a value-up program was launched to address the chronic undervaluation of the Korean stock market, known as the “Korea Discount.” How has the value-up program performed over the past year?
This is Hwang Hyun-kyu reporting.
[Report]
In the first quarter of this year, “Bulldak” ramen accounted for 80% of overseas sales. Its operating profit increased by 67% compared to a year ago. The core of Samyang Foods’ value-up disclosure is the expansion of its overseas business. It includes detailed strategies on how to enhance corporate value.
The foundation of the value-up program is the disclosure of plans for shareholder returns and corporate value enhancement to investors. Since early last year, the stock price of companies participating in the value-up disclosures has risen by an average of 4.3%. This is 10 percentage points higher than the KOSPI, which fell by more than 6% during the same period, indicating that there was some effect in boosting stock prices.
The issue, however, is the participation rate. Out of approximately 2,800 listed companies, only 125, or about 5%, are participating. This is because there are no penalties for not participating. Even Samsung Electronics has been non-participative so far.
Japan, which started its value-up initiatives in 2014, differs in this respect. Instead of merely recommending disclosures, it disclosed lists of companies that failed to comply, effectively giving the initiative a mandatory nature. The Japan Exchange Group even warned that companies with a price-to-book ratio (PBR) below 1 could be delisted, which led to an accelerated rise in Japanese stock prices.
[Lee Hyo-seop/Senior Researcher at Capital Market Institute: “What we should learn from Japan is that diverse stakeholders, such as pension funds and the central bank, participated in the value-up initiatives and provided incentives.”]
China, which joined value-up initiatives last year, also announced potential penalties for companies with low dividends by designating them as management targets.
This was a report by Hwang Hyun-kyu for KBS News.
Camera: Kwon Soon-du/Video Editing: Han Chan-eui/Graphics: Kim Kyung-jin/Footage Courtesy of: Buldak TV
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