KOSDAQ-listed companies posted sharply higher earnings in the first half of the year, setting the stage for share prices to rise as the index rebounds this month, a brokerage said.
Na Seung-doo, an analyst at SK Securities, said in a report on the 24th that the KOSDAQ market is already generating solid profits. "The KOSDAQ tends to draw more attention for its future growth potential, but investors should also note that it is already a market that makes good money, rather than just one that may improve someday," the analyst said. "Since profits are being proven in the numbers, there is no reason to vaguely turn away from it."
According to SK Securities, combined operating profit at all KOSDAQ-listed companies rose 62.4% year-on-year in the first half of this year. Combined revenue reached 216 trillion won ($155 billion), up 23.6% from a year earlier, while net profit surged 260.2% over the same period. The number of companies posting a profit on a cumulative first-half operating basis also rose to 1,033 this year from 978 last year.
The gains were seen as encouraging because the earnings growth was broad-based rather than concentrated in a single sector. Software, semiconductors and steel recorded operating profit growth of more than 100%, while energy, chemicals, retail and media and education also posted double-digit gains.
"In last month's record volatility, the KOSDAQ suffered a decline that exceeded even the levels of the COVID-19 pandemic, but the rebound it has shown this month is outpacing the KOSPI," the analyst said. "Even so, the KOSDAQ index remains undervalued."
"The reason the KOSDAQ has been neglected until now was not a matter of earnings but of supply and demand and investor attention," the analyst said. "As it enters a phase where its earnings appeal is rising, if interest from domestic and foreign investors recovers just a little more, now is the time to sift through the sectors or industries that could lead to large price gains." The analyst added, "Profits have moved, and prices are at the starting line."
The KOSDAQ closed 1.42% higher at 813.33 on the day, according to the Korea Exchange.
