Korea Exchange Publicly Designates 151 Low PBR Stocks
The low PBR companies list has been officially unveiled, with the Korea Exchange naming 151 listed firmsโincluding Lotte Shopping, E-Mart, and Hyundai Steelโas companies with low price-to-book ratios.
The PBR represents a company’s market capitalization divided by its net assets. A PBR of 0.5 indicates that the stock market values the company at only half its book value. Notable firms in the KOSPI market include Lotte Shopping (0.17), E-Mart (0.15), Hyundai Steel (0.19), Lotte Chemical (0.18), Hanwha Life (0.27), Taekwang Industrial (0.23), Nongshim Holdings (0.29), Nexen (0.22), Kolong (0.15), and Hanjin (0.17). In the KOSDAQ market, companies such as Kooksoondang (0.26), KCC Engineering & Construction (0.20), Eugene Corporation (0.26), and Kyungnam Pharmaceutical (0.36) were also included. These companies will now display a ‘low PBR’ tag on brokerage mobile and home trading systems (MTS and HTS).
Background and Objectives of the Value-Up Initiative
The exchange released this list as a follow-up measure to the ‘Capital Market Constitution Improvement Plan’ announced by the government last March. The selection targets companies whose industry PBRs ranked in the bottom 25% for the KOSPI or bottom 10% for the KOSDAQ over the past three years. This step goes a step further than the corporate value-up voluntary disclosure system introduced in 2024. The primary objective is to pressure corporate management to independently analyze the causes of their undervaluation and formulate effective strategies to enhance shareholder value. The exchange plans to support these designated firms by helping them analyze the causes of low PBRs and establish target-setting and performance plans. The list of low PBR companies will be updated and disclosed twice a year, in May and November.
Expert Insights on Corporate Governance and Investment
Jun-seop Kim, a researcher at KB Securities, commented that the true value of this list lies not merely in the roster of undervalued companies itself, but in how it compels management to be mindful of stock prices and actively participate in the value-up program. He added that for investors, it provides an expanded foundation to evaluate target companies based on corporate value-up disclosures.
