It turned out that the tendency of domestic securities firm reports to be skewed toward some large-cap stocks remains serious.
According to FnGuide on the 25th, as of the previous day, the number of reports issued by securities firms over the past year totaled 22,161. The number of stocks covered by these reports was 1,069. There were 405 Korea Exchange main board listings, 660 Kosdaq listings, and 4 Konex listings.
Although there are nearly 3,000 listed stocks in the domestic stock market, the range of stocks analyzed by securities firms was limited to one-third. In particular, due to a lack of corporate information on small- and mid-cap stocks, individual investors are more likely to make investment decisions based on share price swings rather than corporate fundamentals, leaving them more exposed to stock price manipulation risk.
In addition, securities firm reports were not evenly distributed across the 1,069 stocks. Only 60 stocks saw 100 or more reports over the past year. Of these, 58 were on the main board and 2 were on Kosdaq. A total of 8,275 reports, accounting for 37.3% of all reports, were concentrated in these 60 stocks.
Representative examples include Samsung Electronics (299 reports), Hyundai Motor (221), SK hynix (210), Hyundai Mobis (200), and NAVER (200) over the past year, where reports were issued intensively. On Kosdaq, only SME (121) and JYP Ent. (109) made the list.
By contrast, reports on small- and mid-cap stocks were lacking. DI Dongil, which was entangled in the recent "super-rich 100 billion won price rigging" case, had only four reports issued over the past year. The most recent report was published by E securities firm at the end of Jun., saying DI Dongil's earnings were improving faster than competitors and that share buybacks and cancellations continued to protect shareholder value, while maintaining a target price of 55,000 won and a Buy rating. However, the actual share price plummeted for two days starting on the 23rd, closing at 21,500 won the previous day.
The concentration of securities firm reports appears to be linked to the structure of analyst staffing. According to the Korea Financial Investment Association, there are currently 1,110 registered analysts. NH Investment & Securities has the most at 119, and only Samsung Securities, Shinhan Investment & Securities, Korea Investment & Securities, KB Securities, and Hana Securities have 50 or more analysts. In contrast, many small and mid-sized securities firms have only one to three analysts.
As many securities firms focus on top market-cap stocks and on names with high timeliness depending on market conditions, small- and mid-cap stocks are naturally left out. There is also a structural limitation in that listed companies are potential clients for the investment banking (IB) businesses of securities firms, making it hard for analysts to present negative investment opinions. Small and mid-sized firms, with fewer analysts, often publish macro-focused reports or analyze buzzworthy individual stocks after the fact.