KOSPI Doubled, but Krafton Fell 34%

The KOSPI, South Korea's benchmark stock index, surged 106.62% in a year to hit a record high of 6,909.91 on the 11th, yet shares of some large-cap companies such as Krafton, NAVER, and LG Chem actually declined. According to the Korea Exchange, the KOSPI closed at 3,344.20 on September 11 last year, meaning the index more than doubled over the past year. Investors holding these stocks have suffered losses even as the broader market rallied.

NAVER fell from 233,000 won on September 11 last year to 206,500 won on the 11th, posting a one-year return of -11.37%. Krafton's decline was even steeper. Its share price, which stood at 324,500 won on September 11 last year, closed at 212,500 won on the 11th, a drop of 34.51% over the year. LG Chem also slid from 290,000 won to 273,000 won over the same period, down 5.86%.

Major semiconductor stocks showed divergent trajectories. Samsung Electronics soared 253.54%, rising from 73,400 won on September 11 last year to 259,500 won on the 11th. SK hynix jumped 490.23% over the same period, from 307,000 won to 1,812,000 won.

This gap stems from how the KOSPI is calculated. Rather than a simple average of individual stocks, the index is weighted by market capitalization. This structure allows the overall index to surge when heavily weighted stocks rally sharply, even if returns across many other stocks are relatively lackluster.

That said, a stock should not necessarily be considered undervalued simply because its price is lower than a year ago. The appropriate valuation level varies depending on a company's earnings, business conditions, and valuation metrics.