DHP Korea, a manufacturer of eye drops and other ophthalmic agents, faced a three-day limitation in stock trade on KOSDAQ from Wednesday, due to overheating.
The Korea Exchange orders the so-called single price transaction on overheated shares to limit stock trades. The shares under the regulation should trade in every 30 minutes. Calls are gathered in 30-minute basis and shares are sold at a single price in every 30 minutes.
The regulation aims to alleviate short-term overheating, which is judged on stock price growth, volatility, and turnover. The Korea Exchange seeks to curb abnormal surges of stock prices and block speculative transactions.
DHP Korea’s shares jumped about 70 percent from 7,000-9,000 won ($6.5-$8.4) per share in early January to 13,700 won on Tuesday.
News reports have cited the company as “fine dust-themed stock” as its products help people cope with fine dust.
DHP Korea is leading the disposable eye drops market, with its market share of Tearin Eye Drop reaching almost 50 percent.
The company’s flagship products are growing in sales. The company’s 90 percent of revenue comes from ophthalmic agents, which sold 36.79 billion won in the third quarter last year. The quarterly sales were up by 5.75 billion won from the same period a year earlier.
Investors are paying attention to how the latest stock regulation will affect the stock price.
Among biotech and pharmaceutical shares, Celltrion Pharm and Green Cross Lab Cell were designated as overheated stocks and received single price transaction measures on Oct. 16, and Nov. 24, respectively.
One day before the stock regulation, Celltrion Pharm’s shares were 34,050 won per share. During the single price transaction, the stock price inched up. However, the price went down to 32,500 won on the day the regulator lifted the measure.
The Korea Exchange had extended the period of Green Cross Lab Cell’s single price transaction, as the stock price still spiked despite the measure. The regulator extends the stock trade limit if the stock price rises more than 20 percent from the previous trading day.
Before the single price transaction, Green Cross Lab Cell traded at 48,150 won. After the measure, the price soared from 53,700 won to 59,800 won, and to 65,000 won.
<© Korea Biomedical Review, All rights reserved.>