Four out of 10 Korean stocks defeated in market value during pandemic 3 years

2022.09.21 13:54:34 | 2022.09.21 15:18:56

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Secondary battery category has been the primary winner, and cosmetics and retail stocks as losers on the Korean stock market over the last three years under the pandemic influence.

Nearly four out of 10 - 39.7 percent of 808 firms - on the Kospi commanded a smaller market cap as of Sept. 16 versus Dec. 30 2019, according to stock market operator Korea Exchange on Tuesday. The other 60.3 percent or 487 firms expanded in market value.

When combined, 765 Kospi and Kosdaq firms, or 38.4 percent out of all 1,993 listed firms, have seen their value shrivel.

Market capitalization is the total value of a publicly traded company`s outstanding common shares owned by stockholders. It is calculated by multiplying the price of a stock by its total number of outstanding shares, which changes by new share issues or capital reduction, such as share cancellations and repurchases.

Cosmetics firms and traditional retailers suffered the biggest retreat in market cap.

LG H&H, formerly LG Household & Health Care, saw its market value halved to 10.8 trillion won ($7.7 billion) from 19.7 billion won over the same period, and that of Amorepacific declined nearly 40 percent to 7.3 trillion won. The two Korean cosmetics giants have shifted their focus to the United States and Japan as they lost ground in China.

Traditional retailers lost about 20 to 30 percent in market value during the pandemic, which accelerated migration to e-commerce. Market cap of Lotte Shopping shriveled to 2.6 trillion won from 3.8 trillion at the end of 2019, and that of E-mart to 2.6 trillion won from 3.6 trillion won.

Game sector has been mixed due to the boom and bust cycle during the Covid pandemic, as well as the wireless sector.

NCSoft saw its market cap decline 32 percent to around 8 trillion won as its stock continues to tumble due to the Chinese government’s gaming restriction on youth. Netmarble’s market cap fell 34 percent to 5 trillion won over the last three years.

The market cap of PearlAbyss expanded 44 percent to over 3 trillion won, propelled by the success of its new game title.

In the telecommunication network sector, the market value of LG Uplus tumbled 19 percent while KT grew 33 percent, thanks to its aggressive move to groom new growth engines ranging from data center business to content creation.

The biggest winner in the stock market in terms of market value is the secondary battery sector.

Market cap of LG Chem, the parent of the country’s largest electric vehicle battery maker LG Energy Solution, has doubled since the pandemic. That of Samsung SDI rose 155 percent, POSCO Chemical 358 percent, Ecopro BM 795 percent, L&F 1,411 percent, Ecopro 609 percent, and Cosmo Advanced Materials & Technology 659 percent.

Chip stocks, however, stayed about the same. Samsung Electronics’s market cap increased 1 percent and that of SK hynix fell 3 percent.

Naver, a Korean internet giant, recorded a 17 percent growth in market cap in three years.

By Park Yoon-ye and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]