Amid Bull Market, Top 10 Conglomerates' Market Cap Surges by 350 Trillion Won This Year

Total Market Cap of Top 10 Conglomerates Reaches 2,668 Trillion Won
Up Over 350 Trillion Won From End of Last Year
Samsung and SK Groups Alone Add 200 Trillion Won in Market Cap
Hanwha Group Tops Market Cap Growth Rate After Announcing Spin-Off
Hyundai Motor Group Ranks Second With Robotics-Driven Surge

As the KOSPI surpassed the 4,700 mark and continued its record-breaking rally at the start of the year, the combined market capitalization of the top 10 conglomerates has also seen a significant increase. Since the beginning of the year, their market cap has grown by 350 trillion won. Companies in the semiconductor, defense, shipbuilding, and automobile sectors, which have been driving the stock market's strength since the start of the year, have shown particularly notable increases in market capitalization.

According to financial information provider FnGuide on January 15, the total market capitalization of the top 10 conglomerates as of the previous day stood at 2,668.4235 trillion won, up 350.5396 trillion won from the end of last year (2,317.8839 trillion won).

All of the top 10 conglomerates recorded increases in market capitalization this year. Among them, Hanwha Group posted the largest increase at 32.25%, followed by Hyundai Motor Group (28.78%), HD Hyundai (15.73%), Samsung (14.50%), SK (13.06%), POSCO (8.11%), Shinsegae (5.65%), LG (3.43%), GS (3.23%), and Lotte (1.13%).

Hanwha Group saw a sharp increase in market capitalization as defense stocks performed strongly since the start of the year. Hanwha Systems led the growth among the top 10 conglomerate affiliates, with its stock price rising 62.13% since the beginning of the year. Hanwha Corporation followed with a 57.48% increase. Notably, Hanwha's share price surged by more than 25% on the previous day following the announcement of a spin-off. On this day, Hanwha held a board meeting and announced a spin-off, with the surviving company retaining defense, shipbuilding, marine, energy, and financial businesses, and a new company to be established encompassing tech and life businesses.

After the spin-off, the tech and life divisions will be placed under the newly established Hanwha Machinery & Services Holdings. The tech division will include Hanwha Vision, Hanwha Momentum, Hanwha Semitek, and Hanwha Robotics, while the life division will include Hanwha Galleria, Hanwha Hotels & Resorts, and Ourhome. The surviving company will retain Hanwha Aerospace, Hanwha Ocean, Hanwha Solutions, Hanwha Life Insurance, and other affiliates in the defense, shipbuilding, marine, energy, and financial sectors.

Following the spin-off news, Hanwha Galleria hit the upper price limit, while Hanwha Life Insurance rose 10.44%, Hanwha Vision 4.82%, Hanwha General Insurance 4.21%, and Hanwha Solutions 1.76%. However, Hanwha Aerospace Systems (-1.01%), Hanwha Engine (-2.95%), and Hanwha Ocean (-5.27%) declined. Park Geonyeong, a researcher at KB Securities, commented, "Hanwha's spin-off aims to eliminate the holding company's discount through portfolio optimization and simultaneously enhance corporate and shareholder value. Investors are likely to focus more on the potential increase in the new company's corporate value after the spin-off than on the surviving company." He added, "For Hanwha's share price to rise further, there must be market consensus that the combined market capitalization of the surviving and new companies after the spin-off will exceed that of the pre-spin-off entity."

Hyundai Motor Group, which recorded the second-highest market capitalization growth rate after Hanwha, saw eight out of its twelve listed affiliates post double-digit gains, driven by expectations for robotics since the beginning of the year. Hyundai Autoever led the group's market capitalization growth with a 48.34% increase. Lee Jaeil, a researcher at Eugene Investment & Securities, analyzed, "Hyundai Autoever will be responsible for the operation, maintenance, and related activities of robots to optimize productivity when humanoid robots are deployed in smart factories. It will serve as a bridge connecting client companies and the robot affiliate Boston Dynamics. In addition, Hyundai Autoever provides IT infrastructure, operations, and software solutions such as various monitoring, data analysis, and factory operation optimization models related to smart factories. The company is expected to benefit from the group's expanding investments in artificial intelligence (AI)."

Thanks to the strong performance of the semiconductor sector, the combined market capitalization of Samsung and SK groups increased from the 1,600 trillion won range at the end of last year to the 1,800 trillion won range. This was due to the market capitalization of Samsung Electronics rising from 709 trillion won at the end of last year to 830 trillion won, and SK Hynix increasing from 474 trillion won to 540 trillion won.