As the government strongly expressed its intention to revitalize the KOSDAQ market, securities firms also moved to strengthen their research capabilities on KOSDAQ-listed companies. Major brokerages are swiftly reorganizing, including expanding dedicated small-cap staff and increasing the volume of reports.
According to the financial investment industry on the 16th, at least 10 securities firms and asset management companies have reorganized their KOSDAQ research units or revamped how they operate them.
On Feb. 16, IBK Securities launched a "KOSDAQ Research Center" and is working to hire around 10 people. The head of the center is Lee Geon-jae, former head of the Innovative Company Analysis Department, who previously covered small caps at the research center.
Hana Securities also formally launched the "Mirae Industries Team," which covers small caps, last month. The team has three analysts and two RAs assigned, and it is currently adding staff. Previously, the Hana Securities research center handled small-cap research within a small team under the corporate analysis office rather than a formal team.
Moves to bolster dedicated KOSDAQ staff within existing research teams are also in full swing. Daishin Securities' research center new growth industry team added two KOSDAQ staff members in January. Korea Investment & Securities Co. expanded its mid-cap and small-cap staff to eight, and KB Securities increased its "New Growth Company Solutions Team" to five.
Hanwha Asset Management added KOSDAQ research staff for active ETF management. In January this year, Hanwha Asset Management created an "ETF Strategy Management Team" and hired employees with KOSDAQ research capabilities. The team currently operates with five members to run active ETFs.
A Hanwha Asset Management official said, "To run active ETFs, we needed staff with research capabilities to select stocks, so we created the team," and added, "We plan to increase the weight of stocks judged to be promising and will take on the role of uncovering and researching such names."
Securities firms that are reorganizing are expected to focus on "picking good stocks" in the KOSDAQ market through research. As there are many marginal corporations in KOSDAQ, the aim is to select good stocks first.
A Meritz Securities official said, "Up to now, the KOSDAQ market has had many poor-quality corporations and many bad actors, including being used for stock manipulation," and added, "Rather than blindly increasing the number of reports, we are trying to uncover good stocks and publish qualitatively strong reports."
Hana Securities' Mirae Industries Team plans to focus on selecting stocks with technologies related to "robots, artificial intelligence (AI), and space." A Hana Securities official said, "We plan to analyze KOSDAQ as a testbed for future technologies, focusing on technological competitiveness and market scalability rather than short-term earnings," and added, "We will prioritize coverage of AI Semiconductor, AI software, robot automation, autonomous driving, Smart Factory, and Digital Healthcare."
When writing KOSPI industry reports, the firm also plans to link KOSDAQ stocks along the value chain to uncover high-quality corporations.
KOSDAQ-listed companies have long been in a blind spot for brokerage reports. According to statistics released this month by the Korea IR Association, only 25% of KOSDAQ-listed companies last year had an analyst report published. That figure falls far short of the publication rate for KOSPI-listed companies (76%). In particular, the publication rate of KOSDAQ company reports has declined every year since 2022.
A Korea Investment & Securities Co. official said, "Research centers tend to set coverage based on investor interest and market demand," and added, "Also, for a while we focused heavily on overseas stocks, so there were many areas where we could not cover KOSDAQ." The point is that the relatively low share of KOSDAQ reports was due to the market not being that interested.
Lee June-seo, a professor in the Department of Business Administration at Dongguk University, said, "From an investor's perspective, except for a few large-cap names, individual investors have very few opportunities to access information about corporations beyond quarterly financial data," and added, "The fact that more brokerage research reports are coming out helps reduce information access barriers and asymmetry for investors because such reports are forward-looking and indicate the likely direction of stock prices to some extent."
Some also noted that, fundamentally, the KOSDAQ market must become an environment where corporations can grow. Kim Hak-kyun, head of the Korea Venture Capital Association, said, "If KOSDAQ becomes a platform where good corporations can continue to grow, investors will flock," and added, "It is good that more reports are being published, but the most fundamental issue is whether venture corporations can list, raise more investment, and then grow into global corporations through such a platform."