Reorganization of Semiconductor Investment-Centered Business
Overcoming SK Hynix Concentration Phenomenon
Mission Includes Profitability Enhancement and M&A
"He processes tasks quickly and has a meticulous personality, making him strong in details. I thought he was well-suited to be the new CEO."
When SK Square took the bold step of appointing Han Myung-jin, head of the Investment Support Center, as CEO to transform the company into a global semiconductor investment specialist, this was the reaction inside the company. It seems to imply that precision requiring a microscope-like scrutiny is more demanded than handling major tasks.
The new CEO, Han, is currently in a nominee status. He will officially become CEO after the shareholders' meeting and board meeting in mid-next month. The meticulousness required of Han stems from the gravity of his mission, which cannot tolerate even the slightest error. He must strengthen investments in new growth areas such as semiconductors and ICT both domestically and internationally, and reorganize portfolio companies (investment companies) that have been accumulating losses. In particular, he must succeed in investments in semiconductor materials, parts, and equipment (SoBuJang) companies in the U.S. and Japan, as well as the merger of online video service (OTT) companies Content Wave and TVING. This is closely related to SK Group's intensive rebalancing (business restructuring) efforts.
SK Square was established in November 2021 as an investment specialist company through a spin-off from SK Telecom. Its management performance inevitably depends on the results and value of more than 20 portfolio companies. SK Square holds a 20% stake in its core subsidiary SK Hynix. It also operates commerce platforms like 11st, SK Planet, One Store, T map Mobility, and mobility businesses.
The problem is that consolidated results fluctuate wildly depending on SK Hynix's management performance, and most investment companies are struggling with losses. Han is tasked with strengthening the profitability of existing investment companies and shifting the portfolio to focus on semiconductors.
Han, who joined SK Telecom in 1998, has accumulated over 20 years of experience in global investment and business development. He has held key positions at SKT such as Chief Strategy Officer (CSO), head of the MNO marketing group and subscription CO, head of global alliances, and head of global business development. Earlier this year, he moved to SK Square. He has led major management activities such as portfolio value-up and shareholder returns. Although SK Square has CIOs like Ha Hyung-il, a former Macquarie executive, and Song Jae-seung, who has experience at Goldman Sachs, Han was appointed as the new CEO due to his longest tenure within SK Group companies and his deep industry understanding.
The SK Square board's Personnel and Compensation Committee recommended him as CEO, entrusting him with the important task of growing the company into a semiconductor investment specialist within a few years.
The company focused on his leadership as a young leader born in the 1970s. SK Square stated, "With young and fast new leadership, we will focus on strengthening the profitability of the ICT portfolio, shift the investment portfolio to center on semiconductors, and increase shareholder value." Han previously stated at the February earnings announcement, "We will strengthen the identity of a semiconductor-focused investment company through investments across the semiconductor value chain."
Under Han's leadership, semiconductor investments are expected to proceed on two tracks. SK Square has secured over KRW 1.1 trillion in cash, establishing a foundation for large-scale new investments. The sale of part of SK Shieldus's shares to global investment firm EQT Partners for KRW 860 billion last year was instrumental. Having also received KRW 43.8 billion in dividends from SK Hynix in Q1 this year, SK Square is expected by the industry to make large-scale investments in domestic and overseas semiconductor companies aligned with SK Group's strategy. Through the overseas semiconductor investment corporation ‘TGC Square,’ established last year, investments have already been made in semiconductor SoBuJang companies in the U.S. and Japan. The investment results are expected to be announced publicly soon. TGC Square is an investment corporation jointly funded with KRW 100 billion by SK Square, SK Hynix, Shinhan Financial Group, and LIG Nex1.
For other investment companies excluding semiconductors, the focus is on improving profitability. After enhancing profitability, the strategy is to pursue ‘selection and concentration’ through mergers and acquisitions (M&A) or share sales. The sale of 11st and the OTT merger are the biggest tasks. Recently, Oasis, a fresh food dawn delivery specialist, expressed interest in acquiring 11st, marking a new phase. The merger of Wavve and CJ ENM's TVING has reached a broad agreement, with some details still to be negotiated. The industry expects the merger announcement within this year.
Regarding T map, there are expectations that it will settle shares in the loss-making joint taxi business ‘WUTI’ with Uber. Uber holds 51% and T map 49% of WUTI shares. It is known that negotiations have begun for Uber to purchase T map's shares and for share adjustments.
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