Korea Exchange (KRX) said on the 11th that it will announce so-called "low PBR corporations" with low price-to-book ratios (PBR) on Nov. 2. The exchange said the measure is intended to encourage voluntary efforts by listed corporations whose undervaluation has persisted for a long time to boost corporate value.
The exchange said it plans to announce low PBR corporations for the first time following revisions to listing rules and the enactment of the "guidelines on selecting low PBR corporations."
Corporations in the KOSPI market whose PBRs fall within the bottom 25% by industry over three cumulative years (six half-years) are expected to be designated as low PBR corporations. In the KOSDAQ market, corporations within the bottom 10% by industry are subject.
However, only for the first announcement in Nov., if the most recent PBR exceeds the selection threshold, it will be excluded from the low PBR corporations list. The reference date for the PBR in this first announcement is on the 22nd of next month.
From the 14th, listed companies can check their historical PBR values individually through the PBR inquiry service to anticipate whether they will be included among the low PBR corporations subject to announcement.
Also, if they disclose a plan to enhance corporate value that includes a PBR improvement plan by Oct. 22, they will be excluded from being subject to the low PBR corporations announcement for one year. However, corporations that meet the low PBR condition for 12 cumulative half-years will not be excluded from the announcement.
The exchange will announce low PBR corporations on its website on the first trading day of May and Nov. each year and will also display related tags on securities firms' mobile trading systems (MTS).
Meanwhile, the exchange will hold a "regional on-site briefing for listed corporations to boost corporate value" from today through the 18th.
This briefing will accept advance applications from disclosure officers and staff of KOSPI and KOSDAQ-listed corporations and will be held six times nationwide, touring six regions. The exchange expected about 600 attendees.
At the event, to help low PBR corporations prepare corporate value enhancement plans in a timely manner, the exchange plans to provide guidance on institutional improvements such as the announcement of low PBR corporations and on how to prepare disclosures, and various support programs are also expected to be introduced.
The exchange said, "We will continue to actively support corporations that fall under low PBR, high dividend, and special listing so they can understand the institutional improvements and prepare in advance."