South Korea’s top 4 business groups lost more than 2 percent in their market value in the first months of the year, with SK’s cap shrinking nearly 14 percent amid disappointments from reorganization and IPO setbacks.

The combined market capitalization of Korea’s four conglomerate majors – Samsung, SK, Hyundai Motor, and LG – came to 1,106 trillion won ($866 billion) at the end of April, off 2.4 percent from four months ago.

Samsung, with 16 publicly trading units including tech giant Samsung Electronics, saw its market cap sink 10.5 percent to 599.3 trillion won. SK, the third largest conglomerate with 20 listed units, lost 13.8 percent in market cap to 181 trillion won in late April.

The broader Kospi index fell 9.49 percent over the same period.

Bellwether losses largely owed to foreign selling in chip stocks.

Market cap of Samsung Electronics shrank from 467 trillion won to 402 trillion won, and that of second largest chip player SK hynix retreated from 95 trillion won to 81 trillion won.

The two performed as strongly as their super-cycle heyday in the first quarter, but nevertheless were primarily targeted for foreign selloff.

Foreign capital pulled out of key Korean assets as they lost appeal against rising U.S. interest rates and strong dollar.

Other SK stocks also suffered hefty losses.

Market cap of SK bioscience, which went public after spinoff from SK chemical in March 2021, plummeted from 17 trillion won to 10 trillion won. Its stock price plunged to one-third of its 52-week high due to diminishing sales from Covid-19 vaccine contract manufacturing business. The company generates 90 percent of its sales from the vaccine business.

SK IE Technology, materials arm of chemical and refinery firm SK innovation, saw market cap shrink from 11 trillion won to 9 trillion won over the same period. The company went public in May last year.

SK square, parent of security solution provider SK shieldus and app market operator One Store, fell to the lowest level since it was relisted in November last year upon spinning off from SK telecom. SK square’s market cap sank from 9 trillion won to 7 trillion over the last four months. Its stock price recorded fresh 52-week intraday low of 46,350 won on May 6 after SK shiedus canceled its IPO plan.

There were some winners among Samsung and SK families.

Samsung Life Insurance saw its market cap gain 1.5 percent, Samsung Fire & Marine Insurance 3.9 percent, and Samsung Card 6.1 percent, thanks to rising interest rates. Samsung Engineering’s market cap jumped 13.5 percent and Samsung Heavy Industries 6.8 percent on potential benefits from government policy. That of Hotel Shilla rose 4.1 percent and ad agency Cheil Worldwide 10.7 percent as local economic activities resumed.

Within SK family, holding entity SK saw its market cap add 6.7 percent, SK REIT 16.5 percent and SK Rent A Car 10.2 percent.

“Large business groups inevitably experience impact in their market cap from the macroeconomic conditions,” noted Choi Nam-gon, Yuanta Securities analyst. “In the environment of unfavorable exchange rate, high interest rate and rising inflation, industries with tangible assets such as energy has brighter outlook than intangible asset-based industries,” he added.

From January to April, Hyundai Motor’s market cap fell only 5.9 percent to 121 trillion won. Market cap of its main unit Hyundai Motor tumbled 11 percent, but that of smaller automaker Kia gained 1.9 percent while Hyundai Glovis jumped 24.4 percent and Hyundai Steel 6.0 percent.

LG Group’s market cap jumped from 125 trillion won to 205 trillion won, breaking above the 200 trillion won for the first time ever, upon listing rechargeable battery maker LG Energy Solution. The group elbowed out SK to become the second largest business group in Korea.

By Park Yoon-ye and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]