SK overtakes LG to become 2nd largest by market cap in 2 years... Impact of semiconductor and secondary battery industries

CXO Research 발표…SK 172 Trillion·LG 163 Trillion Won
Hynix-ENSOL Market Cap Changes Group Rankings

It has been reported that SK has reclaimed the position of the second-largest group by market capitalization, surpassing LG for the first time in two years. The increase in SK Hynix's market cap and the decrease in LG Energy Solution's (hereafter LG EnSol) market cap are understood to have influenced the overall group market caps. This appears to reflect the divergent performance of the semiconductor and secondary battery sectors.

The Korea CXO Research Institute, a corporate analysis specialist, announced on the 23rd the changes in market capitalization between LG and SK groups following LG EnSol's listing. The analysis covered all common and preferred stocks of the listed companies in both groups.

LG EnSol was listed on January 27, 2022. Immediately after LG EnSol's listing, LG overtook SK to become the second-largest group by market capitalization. On the first day of LG EnSol's listing, its market cap was valued at over 118 trillion KRW. On that day, LG's total market cap was 233 trillion KRW, while SK's was 179 trillion KRW.

At the beginning of last year, SK's market cap had decreased by more than 50 trillion KRW compared to the previous year, down to 123 trillion KRW, widening the market cap gap between the two groups to nearly 80 trillion KRW.

Earlier this year, LG's market cap fell to 190 trillion KRW, narrowing the gap between the two groups. On the 19th, SK recorded a market cap of 171 trillion KRW, surpassing LG's 168 trillion KRW. The day before, SK's market cap was 172 trillion KRW, while LG's was 163 trillion KRW, further widening the difference.

The headquarters of SK Hynix in Icheon-si, Gyeonggi-do.
[Photo by Yonhap News]

The CXO Research Institute analyzed that the change in rankings between the two groups was due to the decrease in market caps of major affiliates such as LG EnSol and LG Chem. Comparing the market cap changes from the first day of LG EnSol's listing (January 27, 2022) to the 19th, LG EnSol's market cap decreased from 118 trillion KRW to 89 trillion KRW, and LG Chem's from 43 trillion KRW to 28 trillion KRW.

In the SK group, SK Hynix's strong performance stood out. Its market cap increased by more than 20 trillion KRW, from the 82 trillion KRW range on LG EnSol's listing day to over 102 trillion KRW on the 19th. Since the 14th of last month, SK Hynix's market cap has surpassed that of LG EnSol.

The CXO Research Institute analyzed that SK Hynix surpassing LG EnSol's market cap is deeply related to the semiconductor industry's recovery and the secondary battery industry's adjustment phase.

Oh Il-sun, director of the CXO Research Institute, said, "While LG EnSol's market cap has fallen since its initial listing, SK Hynix is showing an upward trend," adding, "This can be interpreted as a reflection of the temperature difference between the semiconductor and secondary battery sectors in the recent domestic stock market."