The Korea Exchange held a 'Value-up Program Implementation 1st Anniversary Ceremony' on the 27th, selecting 10 corporations including HD Hyundai Electric, KB Financial Group, and Meriz Financial Group as outstanding corporations in enhancing corporate value (value-up) and awarded them.
The corporate value-up program is an initiative pursued by the government last year to activate the domestic stock market. The exchange emphasized that most domestic and foreign institutional investors positively evaluated the value-up program aimed at alleviating the undervaluation of the Korean stock market (Korea discount). They also expressed hope that the value-up policy would be continuously promoted by the next government.
The commemorative event held at the Korea Exchange's Seoul office in the afternoon was attended by about 200 stakeholders, including pension funds, asset management firms, and listed corporations. They released a white paper detailing the progress of the value-up program, its major achievements, and exemplary disclosure cases, and sought directions for the development of the value-up policy.
Jung Eun-bo, chairman of the exchange, stated in his opening remarks, "Since the implementation of the value-up program, corporations accounting for half (49%) of the KOSPI market capitalization have participated in disclosures, indicating a meaningful change that respects shareholder value, such as the expansion of shareholder returns. Moving forward, the exchange will support the establishment of a culture that values shareholder value in our capital market with a long-term perspective."
Kim Byeong-hwan, chairman of the Financial Services Commission, noted in his congratulatory speech, "As value-up is a task that has formed a national consensus, I believe it will be promoted as a major policy in the next government."
◇ Ten outstanding value-up corporations selected… Incentives provided for index inclusion and tax support
On this day, the exchange recognized 10 outstanding corporations among the 125 that disclosed their value-up plans by March this year for their efforts to enhance corporate value and contribute to the spread of the value-up culture. HD Hyundai Electric, which achieved excellent value-up results based on growth, and KB Financial Group, which actively implemented shareholder returns along with cost of equity (COE) analysis, received the Minister of Economy Award.
Meriz Financial Group actively communicated regarding value-up implementation, while Samyang Foods was recognized for its sales and profitability improvement, and KT&G was selected as a winner of the Chairman of the Financial Services Commission Award for its simultaneous growth and expansion of shareholder returns. Additionally, the Chairman of the Korea Exchange Award was given to five corporations, including Samsung Fire & Marine Insurance, Shinhan Financial Group, Hyundai GLOVIS, KT, and SK hynix.
Award-winning corporations receive eight types of incentives in areas such as taxation and accounting, as well as listing and disclosure. The National Tax Service offers benefits for selecting exemplary taxpayers, corporate tax reduction consulting, and succession consulting, while the Financial Supervisory Service grants additional points during periodic audit deferment reviews. The exchange waives annual fees and additional/transaction listing fees and provides deferment benefits for designating companies with unsatisfactory disclosures. There are also preferences for inclusion in the value-up index and priority participation opportunities in joint investor relations (IR) meetings.
◇ The exchange says 93% of institutional investors positively evaluate the value-up program
On this day, the exchange released a white paper that comprehensively analyzed the progress and participation status of listed companies in the value-up program, along with disclosure details and market trends. According to the white paper, the average price-to-earnings ratio of the disclosing value-up corporations last year was 4.5%, which was 21.5 percentage points higher than the non-disclosing organizations, showing a favorable price trend.
Additionally, according to a survey of 95 domestic and foreign institutional investors, 93% of all respondents were knowledgeable about the value-up program, and 90% positively evaluated the program's goal of alleviating the Korea discount, the exchange explained.
A representative of the exchange said, "The Chief Investment Officer of Santa Lucia Asset Management (SLAM), a Singaporean asset management firm, recently emphasized the need for trust and ongoing implementation, stating in a recent interview with U.S. CNBC that Korea's value-up program is the best-structured policy in the current global capital market."
Market experts from Japan and Taiwan also attended the event, sharing examples of value-up policies from each country and seeking directions for further development. During the discussion session, the experts positively evaluated the achievements of the value-up program but emphasized the importance of continuous implementation.
As the value-up program enters its second year, the exchange plans to expand support, such as education and consulting, to encourage more small and medium-sized listed corporations to participate. A representative from the exchange stated, "We will strengthen the role of institutional investors to expand the investment base for value-up corporations and continue the development and promotion of value-up-linked indices."