Which Group Outperforms Samsung in Group Holding Funds?

[Asia Economy Reporter Song Hwajeong] Recently, other group stocks have outperformed Samsung Group stocks. In particular, LG Group stocks and Hyundai Motor Group stocks have significantly improved their returns, driven by the sharp rise in the stock prices of major affiliates.

According to FnGuide on the 27th, the average 3-month return of 18 other group stock funds with assets under management of over 1 billion KRW reached 20.53%. This figure far exceeds the Samsung Group stock funds' return of 14.03% during the same period. Other group stocks also led in returns over the past month. The recent one-month return of other group stock funds was 9.39%, while Samsung's was 6.65%.

By fund, the 3-month returns of Korea Investment KINDEX Samsung Group Stock SW ETF (Equity) was 18.07%, Samsung KODEX Samsung Group Stock ETF (Equity) was 15.74%, and Mirae Asset TIGER Samsung Group Stock ETF (Equity) recorded 13.49%. Among other group stocks, Mirae Asset TIGER LG Group+ ETF (Equity) rose 34.44%, and Mirae Asset TIGER Hyundai Motor Group+ ETF (Equity) increased 36.21%, outperforming Samsung Group stock funds by about twice.

The strength of LG Group stocks and Hyundai Motor Group stocks was also highlighted in exchange-traded funds (ETFs). TIGER LG Group+ Fundamental and TIGER Hyundai Motor Group+ Fundamental rose 19.16% and 16.32%, respectively, over the past month, ranking among the top ETF returns.

The recent rise in secondary battery-related stocks and automobile stocks is interpreted as leading to the strength of LG Group stocks and Hyundai Motor Group stocks. The average one-month return of 13 listed affiliates of LG Group was 8.87%. LG Chem's stock price surged significantly, driven by secondary batteries, leading the group's stock price increase. LG Chem rose 38.18% over the past month. Other notable increases included LG Display (22.67%), LG Electronics (21.86%), LG (21.78%), and LG Household & Health Care (16.33%).

Lee Sangheon, a researcher at Hi Investment & Securities, analyzed, "The rise in LG Chem's stock price, driven by the growth potential of secondary batteries amid expectations for the expansion of the electric vehicle market, laid the foundation for the rise in LG Group stocks." He added, "Additionally, changes in consumer lifestyles due to working from home after the COVID-19 pandemic have led to trends in the home appliance market such as larger sizes, personalization, and hygiene appliances, highlighting the growth potential of LG Electronics' home appliance division, with stock prices rising 27% since August." In particular, LG Chem is expected to continue strong earnings, increasing its influence within the company. Roh Wooho, a researcher at Meritz Securities, said, "LG Chem's operating profit for the third quarter is expected to be 866.9 billion KRW, marking a surprise for three consecutive quarters," and "The profitability of the basic materials sector, comparable to a boom period, led to a 31% upward revision from previous estimates."

For Hyundai Motor Group, the average one-month return of 12 listed affiliates reached 8.63%. Hyundai Motor rose 35.51%, and Kia Motors increased 16.53%. Innocean (14.44%) and Hyundai Glovis (10.43%) also recorded double-digit gains. Kim Jinwoo, a researcher at Korea Investment & Securities, said, "The recent stock price rise of Hyundai Motor Group is the result of accumulated decision-making over the past three years, with cost reductions led by the new platform and mix improvements led by Genesis being key," adding, "This profit improvement momentum is expected to continue for at least two more years." Kim also noted, "As Hyundai Motor Group's competitiveness in future vehicles strengthens, the multiple, which had been at the lower group level in the industry, will rise to the leading group level."

During the same period, the average return of 16 Samsung Group stocks was 5.63%. Samsung Life Insurance jumped 32.4%, the highest among group stocks, followed by Samsung SDI at 18.24%. Samsung Electronics rose 4.06%.