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Korean Small-Cap Stocks Show Price-Earnings Disconnect, Study Finds
According to Kim Jun-seok, senior research fellow at the Korea Capital Market Institute, a study covering 2003–2025 data from South Korea, the U.S., and Japan reveals that domestic small-cap listed companies' share prices fail to reflect future profitability. The research, presented today at the Institute's 29th anniversary conference, found that while higher stock prices correlate with increased R&D investment among small firms, those investments paradoxically erode future earnings—creating an
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