[Digital Today reporter Oh Sang-yeop (오상엽)] The Korea Exchange has for the first time released 151 listed companies whose price-to-book ratio (PBR) has remained low for a long period. These companies will carry a 'low PBR' label on securities firms' mobile trading systems (MTS) and home trading systems (HTS).

The Korea Exchange said on Monday it selected and announced the 151 low PBR companies as a follow-up step to measures to improve the structure of the capital market. The list comprises 96 companies on the main KOSPI market and 55 on the KOSDAQ market.

The system for announcing low PBR companies was set up to encourage voluntarily improving corporate value at companies that have been undervalued for a long time in the market.

The exchange selected companies whose PBR by market and sector remained in the lower tier over a cumulative three-year period. On the KOSPI market, companies in the bottom 25 percent by sector are eligible. On the KOSDAQ market, companies within the bottom 10 percent by sector are eligible. It classified sectors into 11 categories in line with the Global Industry Classification Standard (GICS).

Based on listed companies as of Oct. 22, it calculated PBR for 2,431 listed firms, excluding those where delisting grounds had arisen. The results showed 185 companies met the low PBR criteria. They included 115 KOSPI-listed firms and 70 KOSDAQ-listed firms.

Of these, 34 companies that had already disclosed corporate value improvement plans were excluded from the final list. They comprised 19 KOSPI-listed firms and 15 KOSDAQ-listed firms. As a result, the final number of low PBR companies to be announced was set at 151.

On the KOSPI market, the list included financial stocks such as DB Financial Investment, Hanwha Life, Hyundai Motor Securities and Heungkuk Fire & Marine Insurance, as well as Lotte Shopping, Lotte Chemical, E-Mart, Hyundai Steel and Taekwang Industrial.

On the KOSDAQ market, the announced list included KCC Engineering & Construction, Kooksoondang, Spigen Korea, Eugene Corp, Korea Capital and Humax.

By sector, the materials sector accounted for the largest number on the KOSPI market with 23 companies, followed by 22 industrials and 18 consumer discretionary firms. On the KOSDAQ market, information technology companies were the largest group with 17, while industrials and healthcare each totaled 10.

The selected companies will be disclosed on the value-up page of the Korea Exchange's listed company disclosure system (KIND) until the day before the next announcement date of May 4, 2027. A 'low PBR' tag is also expected to appear on MTS and HTS, depending on each securities firm's schedule and method.

The exchange will also support one-on-one tailored PBR improvement consulting for all 151 announced companies from next year. It will analyze the causes of undervaluation and help with setting targets and drawing up corporate value improvement plans.

The Financial Services Commission plans to push for revisions to the stewardship code guidelines and checks on implementation so that institutional investors can actively engage as shareholders at low PBR companies.