As the KOSPI broke above 5,000 for the first time ever, there have been meaningful changes in the price-to-book ratio (PBR), a chronic undervaluation gauge for Korea's stock market. Stocks once deemed so undervalued that it was "better to liquidate the corporations" have been disappearing quickly amid a steep rally in recent weeks.
According to the Korea Exchange (KRX) on the 26th, among KOSPI-listed companies (809 issues excluding preferred shares), 271 corporations had a PBR above 1 as of the 22nd. That is about 33% of the total. Compared with a year earlier (247, about 30%), the share of corporations that have exited the undervalued range has inched up.
PBR is a metric that divides a stock price by net asset value per share. A reading below 1 means a corporation's market capitalization is lower than its "liquidation value," the value realized if all assets are sold and the business is shut down. Korea's stock market has long suffered from the so-called "Korea discount," in which the market recognizes neither future profitability nor even the value of current property held by corporations.
However, as the index has climbed sharply of late, the market's overall valuation has risen significantly. The KOSPI's overall PBR, which was 0.89 a year ago—below book value—rose to 1.67 as of the day. With the era of 5,000 on the index now open, some say the chronic undervaluation of Korea's market is easing to a degree.
In particular, the improvement in PBR among large-cap leaders of the rally stood out. Samsung Electronics' PBR rose to 2.63 from 1.04 a year ago, and SK hynix jumped to 7.04 from 2.9. Hyundai Motor, which had lingered in a deeply undervalued phase due to tariff effects, climbed to 1.28 from 0.59, regaining a valuation above liquidation value. The market's reassessment is seen as a result of new businesses such as Robotics emerging as fresh growth drivers.
Over the same period, changes were also clear among financials and holdings companies that directly benefited from the "value-up policy." Korea Investment Holdings (0.54→1.13), Mirae Asset Securities (0.45→1.44), HD Hyundai (0.81→1.98), LS (0.70→1.29) and SeAH Besteel Holdings (0.37→1.36) are representative.
In fact, over the past year (Jan. 22, 2025–Jan. 22, 2026), the KOSPI rose 96.68%, far outpacing major peers such as the U.S. Standard & Poor's (S&P) 500 (13.59%), China's Shanghai Composite (27.63%) and Japan's Nikkei 225 (34.36%).
However, the rally being concentrated in large blue chips is cited as a limitation. Excluding the KOSPI 200, the PBR of the remaining issues rose only to 0.7 from 0.6 a year ago, still stuck below 1 in the undervalued range.
Meanwhile, despite these results, some note that Korea's market valuation remains low compared with major global markets. The KOSPI PBR has risen to around 1.6, but the gap is large versus the U.S. S&P 500 (5.35) and the Nasdaq (8.16). It has surpassed China's Shanghai Composite (about 1.5), but remains below Japan's Nikkei 225 (2.57) and Europe's Euro Stoxx 50 (2.45).
Bloomberg said that "although the KOSPI hit a record high, its PBR is only 1.6," adding, "this is lower not only than rival Taiwan (about 3.6) but also the MSCI Emerging Markets Index (about 2.2)." The takeaway is that breaking 5,000 is not the end; further corporate governance improvements and expanded shareholder returns are essential to normalize valuations in line with global standards.
Kim Jae-seung, an analyst at Hyundai Motor Securities, said, "It is true that the KOSPI PBR is historically high (after its recent steep rise), but considering stronger profit growth, it is still the cheapest among major global markets."