Two out of five Korean stocks underperform book value with P/B below 1.0

Kang Min-woo and Lee Ha-yeon 2022. 6. 21. 11:48
글자크기 설정 파란원을 좌우로 움직이시면 글자크기가 변경 됩니다.

이 글자크기로 변경됩니다.

(예시) 가장 빠른 뉴스가 있고 다양한 정보, 쌍방향 소통이 숨쉬는 다음뉴스를 만나보세요. 다음뉴스는 국내외 주요이슈와 실시간 속보, 문화생활 및 다양한 분야의 뉴스를 입체적으로 전달하고 있습니다.

[Source: Korea Exchange]
With the main indices losing nearly 20 percent this year, as much as 40 percent of Korean listed companies have come to underperform their book value.

As of Monday, a total of 853 companies trading on the main Kospi and the secondary Kosdaq showed price to-book ratio P/B ratio of below 1.0x as of June 17, 35 percent greater compared with December.

The P/B ratio is an indicator whether a stock is overvalued or undervalued, with the figure below 1.0x meaning that a company’s current market value is below its book value, or undervalued, and vice versa for above 1.0x.

Undervalued stocks halved last year from 1,300 in May 2020 when massive foreign selling from the virus outbreak had devastated the Korean market. But the number surged in line with the slide in Korean stocks.

Even large-cap stocks are now poorly valued.

LG Chem’s P/B ratio fell to 0.97x as of June 17 from 1.6x late last year, CJ CheilJedang to 0.95x from 1.2x, Kumho Petrochemical to 0.83x from 1.77x, and Meritz Financial Group to 0.93x from 1.76x.

The bottom however is yet to come.

Kospi-listed firms’ P/R ratio averaged at 0.96x as of last Friday. The average PBR came at 0.88x in October 2018 when the trade row between the U.S. and China spilled over the financial market, and 0.81x in October 2008 with the Wall Street meltdown. In March 2020, the figure stood at 0.64x amid the virus pandemic.

[ⓒ Maeil Business Newspaper &, All rights reserved]

Copyright © 매일경제 & 무단 전재, 재배포 및 AI학습 이용 금지

이 기사에 대해 어떻게 생각하시나요?