The seafood processor Hansung Enterprise(003680), famous for crab sticks, has been surging for five straight trading days as an online feel-good story about an "patriotic company" spreads. As consumers move from buying products to buying the stock, the share price has jumped to exactly double from the close on the 3rd.
At 9:24 a.m. on the 10th, Hansung Enterprise was trading at 8,460 won on the main board, up 1,950 won (29.59%) from the previous session. It hit the daily upper limit during the session and set another record high.
Hansung Enterprise has risen for five consecutive trading days, with the share price jumping to exactly double from the close at 4,230 won on the 3rd. Its market capitalization has also expanded quickly, prompting assessments that it has stepped back from delisting concerns.
Behind the stock surge is word of mouth about a "patriotic company" spreading online. As it became known that Hansung Enterprise has sponsored the "Concert for Heroes" for United Nations veterans of the Korean War for 25 years, consumers' so-called "donjjul" movement spread.
On online communities and social media, posts read, "We'll never let go of crab sticks," and "Patriotic corporations must survive," and posts continued certifying purchases of Hansung Enterprise products such as crab sticks along with claims they bought the stock. The company's official online mall, "Hansung Market," reportedly saw orders tens of times higher than usual.
Hansung Enterprise, founded in 1963, is a seafood processor that grew on the strength of its flagship crab sticks, but last year its operating profit fell short of 6 billion won, sending the stock below 4,000 won. As the KOSPI market-capitalization requirement for listing maintenance was raised to 30 billion won, delisting risk was once discussed.
However, as the share price has surged recently, the market capitalization has rebounded quickly. As of 9:24 a.m. that day, the market cap exceeded 52.5 billion won.
Hansung Enterprise also expressed gratitude in a recent official statement.
The company said, "We deeply appreciate the compliments and support you have generously given Hansung Enterprise on online platforms and social media recently."
It added, "The 'Concert for Heroes' is an event that Hansung Enterprise has carried on for many years with the Korea Patriots and Veterans Culture and Arts Association, where the chairman serves as the chair of the board, to express thanks to UN veterans, now in its 25th year," and explained, "We have been quietly proceeding out of respect for those who devoted themselves to the country."
It continued, "Rather than being praised under an excessive name led by a corporation, we hope the service and dedication of the heroes who sacrificed for the country become better known," and said, "We will work to convey our thanks and respect to the heroes even better, together with the hearts of customers who love the Republic of Korea."
However, it corrected as untrue the online claim that it is a "company that uses only domestic raw materials."
Hansung Enterprise explained, "We also use imported materials and supplies. To offer good-quality products at affordable prices, we selectively use materials and supplies from various countries along with domestic ones. We disclose this transparently on our website."