Hansung Enterprise, which had been pushed to the brink of delisting, has turned into a daily-limit gainer in just a matter of days. The turnaround followed the belated revelation that the company had supported Korean War veterans for 25 years, prompting consumers to buy its products and investors to buy its shares in a wave of "donjjul" — a Korean term for rewarding a good company through purchases.
"Two straight days at the daily limit from delisting risk"
According to the Korea Exchange, Hansung Enterprise closed at 8,460 won on the 10th, up 29.95% from the previous trading day. With the stock jumping nearly 80% over five days, its market capitalization swelled to 52.5 billion won, easing concerns over delisting.
Hansung Enterprise is a comprehensive food company known for products such as crab sticks and fish cakes. However, due to the recent rise in raw material prices and bond impairments, its revenue last year fell 4.2% from a year earlier to 318.4 billion won, and operating profit declined from about 11 billion won to 5.8 billion won. Its share price also fell to the 4,200 won range at one point last month, reducing its market capitalization to around 26.1 billion won.
On top of this, the possibility of delisting was raised as the KOSPI listing maintenance standard was strengthened this month to require a market capitalization of at least 30 billion won. The Korea Exchange raised the threshold to clear out troubled listed companies, and the standard is set to be raised once more to 50 billion won in January next year.
Veteran Support Rediscovered... Products and Stock Both Get 'Donjjul'
What changed the mood was the company's social contribution activities, which were rediscovered online. As it became known that Hansung Enterprise had sponsored a "Concert for Heroes" for United Nations (UN) war veterans for 25 years, posts saying "companies like this deserve support" spread quickly across social networking services (SNS) and online communities.
In response, consumers posted proof of product purchases along with proof of stock purchases one after another, and at the time orders poured into the company's own online mall "Hansung Market" to the point that some products sold out or deliveries were delayed. Online reactions continued, including "It's worth the wait even though delivery is late" and "Let's support a good company through consumption."
In an official statement, Hansung Enterprise said, "We are deeply grateful for the support and encouragement we have recently received," while adding, "We feel cautious about whether we alone are receiving excessive praise."
Regarding the veteran support event that became a topic of discussion, the company explained, "It is an event we have continued for 25 years together with the Patriots and Veterans Culture and Arts Association, where our chairman serves as chairman of the board," and "It is an activity we have quietly continued out of gratitude toward those who devoted themselves to the country." It added, "This event was possible because of the volunteer efforts of various sponsoring companies and musicians," giving credit to those who shared in the work.
Grateful, But Drawing a Line at the "Good Company" Label
Hansung Enterprise explained that some claims that spread online were not true. In particular, regarding the assessment that it is "a company that uses only domestic ingredients," it said, "We also use imported raw materials," and "We select and use a variety of domestic and overseas raw materials for reasonable prices and quality."
It also said, "Rather than grand modifiers, we will remain an honest food company faithful to the basics," and "We will take responsibility for the trust our customers have shown us and repay it with better products."
The market views this case as going beyond a simple stock surge, as an example in which a company's social contribution activities led to consumption and investment — a case of "value consumption" affecting the stock market as well. However, some point out that with the burden growing on small and mid-sized listed companies with low corporate value due to the strengthened delisting standards, it is difficult to judge a company's long-term competitiveness based on temporary attention alone.
