[Asia Economy Reporter Minji Lee] It has been revealed that the profitability of Samsung Group, the top company in the domestic business world, has fallen behind active funds holding stocks of Lotte Group, following Hyundai and LG Group funds.
According to financial information provider FnGuide on the 8th, the year-to-date return of the ‘Hana UBS Lotte Group Stock Securities Investment Trust’ recorded 19.47%, significantly outperforming Samsung Group stocks (3.7%) during the same period. The fund’s assets under management amount to 5.1 billion KRW, with major investment holdings including Lotte Chilsung (11%), Lotte Shopping (10.5%), Lotte Fine Chemical (10.5%), Lotte Chemical (10.4%), Lotte Holdings (9.9%), Lotte Himart (9.8%), Lotte Confectionery (9.4%), and Lotte Food (9.3%). Due to the impact of COVID-19, the Lotte Group fund, based on the food and distribution sectors, posted a 29% return over the past year, which was lower than the Samsung Group fund’s average return of 36.62% during the same period. However, this situation reversed this year as the main investment stocks showed an upward trend.
Post-COVID-19 resumption of outdoor activities has improved the distribution industry conditions, and increased operating rates and market share recovery among major food companies have led to high returns. In particular, Lotte Shopping, a distribution company, is expected to see further gains as its performance improves visibly, centered on department stores, due to expanded revenge consumption. As of the first quarter, the same-store sales growth rate of department stores was 18%, and it recorded 20% in April, maintaining a high growth trend. Duty-free shops are also experiencing increased reselling demand, mainly from daigongs (Chinese traders). Profitability is expected to rise sharply once free movement between countries becomes possible through vaccination. In the food sector, companies such as Lotte Chilsung and Lotte Confectionery are expected to deliver favorable results. Researcher Jeongseop Kim of Shin Young Securities said, “After COVID-19, most food and beverage companies like CJ CheilJedang and Pulmuone enjoyed a windfall benefit, but Lotte food companies were excluded from the rally due to stronger reflections of anti-Japanese boycott movements and concerns over reduced operating rates. This year, due to the base effect from the previous year, the performance improvement of Lotte food companies will be quickly reflected in stock prices.”
Among group stocks, Hyundai Motor Group showed the highest performance this year. The ‘Mirae Asset TIGER Hyundai Motor Group Listed ETF’ achieved a nearly 30% return year-to-date and recorded a 95% return over one year. This was mainly due to holding more than half of its portfolio in automobile-related companies such as Kia Motors (24%), Hyundai Motor (23%), and Hyundai Mobis (16%). The securities industry is optimistic that Hyundai Motor Group’s market share entering double digits in the U.S. market last month could lead to a mid- to long-term revaluation of its stock price. Among LG Group stocks, the ‘Mirae Asset TIGER LG Group ETF,’ which invests in LG Electronics (19%), LG Chem (17%), and LG Display (16%), recorded a solid return of around 14% year-to-date.
During the same period, among Samsung Group funds, the ‘Korea Investment Samsung Group Leading Plus Securities Investment Trust’ showed the best performance with a 12% return. According to the recently issued management report, it holds group stocks such as Samsung Electronics (24.83%), Samsung SDI (4.56%), Cheil Worldwide (3.62%), Samsung SDS (3.21%), and Samsung C&T Corporation (2.32%). The year-to-date stock price increase rates of major holdings like Samsung Electronics and Samsung SDI fluctuated around 1%, resulting in poorer returns compared to other group stock funds. Other Samsung Group stock funds also posted single-digit returns during the same period.
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