In contrast to the strong performance of cybersecurity stocks in the U.S. stock market, domestic corporations are experiencing a downward trend in their stock prices. Cybersecurity is gaining attention as a key technology for the next generation, with companies seeing an upward trend in their earnings, but domestic prices do not reflect this situation. In particular, relevant stocks in Korea are experiencing repeated mid-session drops, being perceived as a type of theme stock. The government's passive industrial support is also dampening investor sentiment.
◇ Diverging stock price trends of South Korean and U.S. cybersecurity stocks
According to the Korea Exchange on the 10th, most major domestic cybersecurity corporations have seen their stock prices decline over the past year. During this period, MonitorLab's stock fell from 6,490 won to 3,115 won, marking a 52.0% decrease, the largest drop recorded. During the same period, FastRetail experienced a 50.7% decline from 8,970 won to 4,415 won, halving its stock price. RaonSecure and Genieus dropped by 29.2% and 21.5%, respectively, in one year. Additionally, Igloo fell by 20.1%, and Wins decreased by 2.6%.
On the other hand, U.S. cybersecurity stocks are performing well. Palo Alto Networks, considered the leader in cybersecurity, saw its stock rise from $298.42 to $388.94, an increase of 30.3% over the last year. During the same period, the stock prices of Cloudflare and CrowdStrike rose by 46.8% and 45.7%, respectively. Additionally, Zscaler saw a 3.6% increase.
As the stock price trends of South Korean and U.S. cybersecurity stocks diverge, the performance of corporations is showing signs of improvement. In the third quarter, Genieus reported an operating profit of 2.2 billion won, up 660.8% year over year. Revenue also increased to 10.4 billion won, a 34.9% rise from the same period last year. RaonSecure reduced its loss margin, with revenue reaching 14.9 billion won, an increase of approximately 69% compared to the previous year.
As of last October, Palo Alto Networks reported revenue of $2.1388 billion, reflecting a 13.8% increase compared to the same period last year. Zscaler reported revenue of $593 million in September, a 30.0% increase year over year. CrowdStrike also saw a 27.3% revenue increase compared to the previous year.
◇ Korean government policies stagnate… U.S. increases cybersecurity expenditure
In South Korea, while cybersecurity is recognized as a key technology for the next generation, it has not maintained its upward momentum and remains trapped in a type of theme stock. Earlier this year, it benefited as an 'AI security stock,' but the success was short-lived. For instance, Igloo Corporation gained attention as an AI security stock earlier this year, with its stock rising to 8,680 won, but it has since fallen by more than 43%.
The government's passive budget support is also dampening investor sentiment. Initially, the government declared its intent to nurture the information security industry as a national strategic industry, planning to establish a cybersecurity fund and train 100,000 cybersecurity talents, aiming to grow the information security market to 30 trillion won by 2027. However, next year's budget has been reduced, and the training of 100,000 cybersecurity talents remains stagnant.
In contrast, the related market is rapidly growing in the United States. As digital crimes between organizations and individuals continue to rise, the demand for cybersecurity is increasing. The U.S. government is expected to increase its cybersecurity-related expenditure for the 2024 fiscal year across federal departments, excluding defense, by 13.7% from the previous year, amounting to approximately $12.7 billion (16.5 trillion won).
A security industry official noted, "Unlike the United States, most domestic cybersecurity corporations are small to medium-sized enterprises. While the importance of cybersecurity itself is growing, it is difficult for the industry to grow rapidly in the short term."