Top 10 Groups' Market Capitalization Increased by 50 Trillion in Q1

Increase from 1,350 trillion to 1,400 trillion at the end of last year
Six groups turn to market cap growth in January, recovering from sluggishness
Posco continues to struggle amid secondary battery adjustment

Since February, the stock market has shown strength, resulting in the market capitalization of the top 10 conglomerates increasing by nearly 50 trillion won in the first quarter of this year. The rise in semiconductor stocks and expectations for corporate value-up programs drove the increase in market capitalization of the top 10 groups, led by low price-to-book ratio (PBR) stocks.

According to financial information provider FnGuide on the 1st, as of the 28th of last month, the combined market capitalization of the top 10 groups rose from 1,350.9657 trillion won at the end of last year to 1,400.51 trillion won. Although the stock prices showed weakness since the beginning of the year, causing the market capitalization of the top 10 groups to decrease by about 100 trillion won in January, the subsequent rise in stock prices after the end of January fully recovered this loss.

In January, all top 10 groups experienced a decline in market capitalization compared to the end of last year, but with the recovery in stock prices, six groups turned to an upward trend. SK saw the largest increase in market capitalization in the first quarter. SK Group’s market capitalization rose 15.34% from 180.5294 trillion won at the end of last year to 208.2159 trillion won, surpassing 200 trillion won. Hanwha followed with a 10.85% increase, GS 9.10%, Hyundai Motor 9.03%, HD Hyundai 6.55%, and Samsung 4.94% each saw their market capitalizations grow.

On the other hand, Shinsegae (-5.10%), LG (-5.69%), Lotte (-6.75%), and POSCO (-17.95%) recorded declines in market capitalization. Notably, POSCO, which had the highest market capitalization growth rate last year, was the only one among the top 10 groups to record a double-digit decrease.

The increase in market capitalization of the top 10 groups was led by the strength of semiconductor and low PBR stocks. The AI (artificial intelligence) boom boosted semiconductor stock prices, which in turn affected the market capitalization of group stocks. Samsung Electronics recently reached the 80,000 won level for the first time in 2 years and 3 months, and SK Hynix also broke through 180,000 won, setting new all-time highs day after day. Samsung Electronics’ stock price rose 2.92% this year, while SK Hynix increased by 25.94%. Kim Jung-yoon, a researcher at Daishin Securities, analyzed, “The KOSPI rose to an intraday high of 2,779.40 on the 26th of last month, setting a yearly high. After the March Federal Open Market Committee (FOMC), uncertainty related to monetary policy events subsided, and the AI semiconductor momentum was re-highlighted, leading to further gains.” He added, “With expectations for the high-bandwidth memory (HBM) market intensifying, Samsung Electronics and SK Hynix effectively led the KOSPI’s rise.”

The strength of low PBR stocks also contributed to the increase in market capitalization of the top 10 groups. Many of the top market capitalization gainers were holding companies or stocks with high expectations for shareholder returns. SK Square’s stock price rose more than 49%, Samsung Life Insurance increased by 38.21%, and SKC by 32.01%. Additionally, Samsung C&T (23.63%), GS (18.58%), and Hyundai Motor (16.46%) recorded high stock price gains.

Conversely, due to the ongoing adjustment in secondary battery stocks since the second half of last year, POSCO showed the weakest performance among the top 10 groups. Its market capitalization, which was in the 93 trillion won range at the end of last year, dropped to the 77 trillion won level. POSCO recorded a 123% increase in market capitalization last year, ranking first among the top 10 groups in growth rate, but this year it showed the opposite trend. All six of POSCO’s listed affiliates saw their stock prices decline. POSCO DX’s stock price fell 34.57% this year, marking the largest drop among the top 10 groups’ listed affiliates. POSCO DX had shown a record surge last year, with its stock price soaring 1,087.20%, but it has been sluggish this year. Other affiliates also recorded double-digit declines: POSCO M-Tech (-21.77%), POSCO Future M (-15.74%), POSCO Holdings (-15.72%), POSCO International (-14.74%), and POSCO Steelion (-14.31%).