KOSDAQ Falls 7.65%, Yet Melcon, Duchembio and Raon Secure Rose

Seoul — KOSPI closed down 7.57% at 5,554.22 and KOSDAQ (tech- and small-cap-heavy market) down 7.65% at 760.82 on Oct. 15. The three biggest gainers were Melcon (179880, +40.65%), Duchembio (176750, +30.0%) and Raon Secure (042510, +17.31%). None had a company filing that explains the move: Melcon rose on its first trading day, Duchembio on hopes for domestic approval of a new drug, and Raon Secure on reports of a government project win.

At a glance

With the market down more than 7%, the three moves look driven by stock-specific factors or flows rather than overall risk appetite. In Raon Secure's case, one outlet noted that quantum-cryptography and quantum-computing stocks were weak the same day.

Melcon (179880): debut-day gain narrowed from the 80% range to 40%

Melcon's rise is explained by first-day trading, not by a confirmed catalyst. It listed on KOSDAQ today and closed at 17,300 won, up 40.65%, on trading value of 567.5 billion won, about 2.6 times its market cap of 218.0 billion won. Brigde Economy reported at 10:34 a.m. that it had broken through a "double" (up 100%) with gains in the 80% range. Around 1:30 p.m. it was up 63.82%, and it closed at 40.65%. The Korea Economic Daily wrote that newly listed stocks Melcon and Jinocostek had a "roller coaster" first day during the sell-off.

The company was described as a semiconductor-process firm (Today Korea). Biz Tribune's headline carried the phrase "second-half earnings growth to begin in earnest," but the headline is all that confirms. There is no company filing, and as a first-day listing there is no earlier price to compare against.

Two things help judge whether the gain lasts: whether trading value stays in the hundreds of billions of won next session, and the institutional lock-up commitments, their release dates and the tradable float.

Duchembio (176750): limit-up on hopes for Alzheimer's drug approval (no filing)

Duchembio rose 30% to 8,970 won on hopes for Korean approval of Eli Lilly's Alzheimer's treatment Kisunla. ETNews, Chosunbiz, Consumer Times and others reported the same reason. Around 1:30 p.m. it was up 18.7%, and it closed at the 30% daily limit. Over two sessions it is up 31.1%.

The company has filed nothing, and no headline says approval has been granted. A Korea IR Service report describes it as a radiopharmaceutical maker, and the logic behind the hopes seems to be that wider use of an Alzheimer's drug could raise demand for pre-treatment PET scans. On the other side, Newsworker ran an analysis the day before titled, in translation, "Dominates the market but earnings aren't there yet; financial and quality burden ahead of a large CDMO investment."

Trading value was 25.3 billion won, about 10% of its 255.5 billion won market cap. Whether the gain holds depends on whether a Kisunla approval timetable is announced, and whether the company ties it to its own business through a filing or IR.

Raon Secure (042510): up 17% on reported government physical-AI security project (no filing)

Raon Secure rose 17.31% to 21,350 won on reports that it was picked as lead company for a government physical-AI security R&D project. Daily Secu, Marketink and Namdo Ilbo carried it, describing issuing "digital IDs" to robots. No company filing appeared on DART (Korea's official disclosure system) in the past seven days. The project's value and term are not given in the headlines, so its size relative to company revenue cannot be judged.

The shares were already climbing: up nearly 30% on Oct. 6 and about 30% over five sessions. The gain was 19.78% around 1:30 p.m. and narrowed to 17.31% at the close. Newspim reported at 11:30 a.m. that foreign and institutional investors were net buying at the same time, but that was an intraday figure and the closing flow is not known. Pinpoint News contrasted the stock with weak quantum-cryptography names and asked why it rose. Eugene Investment & Securities wrote on Aug. 27 about the expanding commercialization of post-quantum cryptography; second-quarter revenue was 12.2 billion won with an operating loss of 700 million won.

What to watch is whether the company discloses the project's size and term in a filing or IR, and whether trading value holds after a rise of nearly 30% in five sessions.

What happened to the stocks we covered earlier

Most stocks we labeled "reports only" have fallen since, a period that includes today's 7.65% KOSDAQ drop.

Kukje Pharma, backed by a filing, still fell 13.2%, so a filing alone did not prevent a decline. Seosan, which rose for no stated reason, fell 25.2%, among the steepest drops.