Samsung, Hyundai Motor lose market worth while LG and HHI add value in bear market

2022.08.04 10:47:43 | 2022.08.04 15:29:17

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South Korea’s top 20 business groups have lost 168 trillion won ($128.04 billion) in market capitalization due to bearish run for most of the year, while shipbuilding and defense heavyweights Hyundai Heavy Industries and Hanwha managed to buck the trend.

According to the Korea Exchange on Wednesday, the total market value of Korea’s largest 20 conglomerates including top five Samsung, LG, SK, and Hyundai Motor declined to 1,411.37 trillion won from 1,579.52 trillion won at the beginning of the year. Samsung Group was liable for the bulk of the loss, with its combined market cap off 113.22 trillion won so far this year, followed by SK, Kakao, Naver, and Hyundai Motor. Large-cap chip, lithium-ion, and internet platform stocks plunged as foreign investors cashed out amid faster rate increases in the U.S.

LG, Hyundai Heavy Industries, KT, and S-Oil expanded their market value from the beginning of the year. LG Group climbed to No. 2 in market cap after the listing of heavyweight LG Energy Solution. Hyundai Heavy Industries shares surged 40 percent since the beginning of this year on growing expectations for a turnaround in the overall shipbuilding industry. Its affiliate Hyundai Mipo Dockyard shares gained 46 percent, backed by a brisk outlook for the second half and the strong U.S. dollar. Hyundai Energy Solutions, a renewable energy solution provider, surged 140 percent over expectations on its earnings down the road.

Hanwha overtook Doosan, ranking 11th in terms of market cap. Hanwha Solutions contributed significantly to the rise as its market cap increased by 22 percent. Shares of its affiliates in the defense sector, Hanwha Systems, Hanwha Aerospace, and Hanwha Corp., rallied on upbeat outlook after its massive defense deals with Poland. Hanwha Group’s governance restructuring has also helped. It recently announced that Hanwha Corp. and Hanwha Defense will be merged under Hanwha Aerospace.

Korea’s leading game developer Netmarble, however, retreated four steps to rank 18th in market cap after massive selloffs in growth stocks amid monetary tightening. Its lack of new releases and a sales reduction in existing game portfolios dragged its market cap to half.

Netmarble’s second-quarter operating profit was down 35.2 percent to 10.5 billion won. Its sales declined 13.8 percent to 656.9 billion won, said Kim Hyun-yong, a researcher at Hyundai Motor Securities. Hyosung Group was kicked out of the top 20 list, ranking 22nd, while S-Oil joined the list, advanced two notches to 19th place.

By Kim Geum-yi and Jenny Lee

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