South Korea Introduces Rules for Low PBR Companies, First List to Be Announced in November, Long-Term Undervalued Companies to Be "Tagged"

TechFlow News, July 28, according to South Korean media NATE, the Korea Financial Services Commission and the Korea Exchange announced detailed rules for the public disclosure system of companies with low price-to-book ratio (PBR), planning to include listed companies ranked in the bottom 25% of PBR in each industry on the main board (KOSPI) and the bottom 10% on the growth market (KOSDAQ) within the disclosure scope, to urge companies to enhance shareholder value. According to the plan, after disclosing a corporate value enhancement plan containing low PBR improvement measures, a 1-year disclosure exemption can be obtained; but companies that have been in the low PBR range for 6 consecutive years will still be included in the list even if they have disclosed improvement plans.

The Korea Exchange expects that the final number of disclosed companies will be about 220, accounting for 5% to 10% of the total number of listed companies in the two markets, among which about 120 long-term low PBR companies will not be able to enjoy the exemption. The first batch of low PBR company lists is planned to be announced on November 2, and will be marked with a "Low PBR" label on the exchange announcement website and securities firm trading systems.