Speculation over company founder’s presidential bid drives up stock price
The stock price to earnings ratio of AhnLab Inc. soared over 100 Tuesday as the founder of the anti-virus software company continues to be counted as a strong presidential hopeful for the opposition bloc.
It is the first time a company of this size has seen its PER, or the price paid for a share divided by the annual net income earned by the firm per share, reach 110 since the dotcom bubble about 10 years ago.
AhnLab’s stock price on Monday closed at 159,800 won per share, nearly 110 times its net profit per share last year. It closed at 157,400 won per share on Tuesday.
Ahn Cheol-soo, major shareholder of AhnLab and dean of Seoul National University’s Graduate School of Convergence Science and Technology, emerged as a potential political leader after he spoke about running for Seoul mayor in October.
He chose to back current Seoul mayor Park Won-soon instead, and his endorsement was considered key in the lawyer-turned-civic activist’s win.
Ahn has never confirmed nor denied he will run for president, but has continued to top polls on potential candidates, maintaining a lead over the ruling Grand National Party’s Park Geun-hye. The stock price of AhnLab jumped over 633 percent last year on Ahn’s popularity.
Thanks to the skyrocketing prices, the market capitalization of AhnLab has reached 1.6 trillion won, ranking fourth among companies listed on the tech-heavy KOSDAQ. It briefly beat CJ O Shopping on Tuesday, becoming No. 3 after Celltrion Inc. and Daum Communications.
“AhnLab has always shown steady earnings, but its unusual stock price hike in the past several months was purely due to political speculation and has nothing to do with the company’s fundamentals,” Chung Dae-ho, an equity analyst following software companies at LIG Investment and Securities.
The PERs of most software companies in the game or Internet portal industry range between 15 and 20, according to Chung.
AhnLab’s net profit in the first three quarters of last year dipped 12.6 percent from a year ago.
As the country heads toward the general elections in April and presidential race in December, stocks related to Park Geun-hye’s policy to raise birth rates are also showing abnormal hikes.
Stock prices of Agabang and Company jumped 522 percent and Boryung Inc. 419 percent last year.
EG Corp., in which Park’s brother Ji-man holds a controlling stake, hit record highs for three days in a row. The stock price of the oxidized steel maker jumped 14.93 percent to close at 77,000 won per share on Tuesday.
By Kim So-hyun