Inverse of Tech
While the market capitalizations of companies that focus on semiconductors, secondary batteries, and automobiles -- Samsung Group, SK Group, LG Group, Hyundai Motor Group, and POSCO Group -- have increased, those of retail-heavy companies like CJ Group, Shinsegae Group, GS Group, Lotte Group, and others have shrunk. Experts blame a drop in those of the retail-heavy business groups on concerns over an economic downturn and weakened consumption.
According to financial information firm FnGude, CJ Group saw the largest drop in market capitalization among the country’s top 15 conglomerates during the Jan. 2 to June 23 period of 2023. From nearly 16.5 trillion won (US$12.7 billion) at the start of the year, CJ Group’s market capitalization currently stands at about 12 trillion won, down by about 25 percent.
The stock price of CJ Group’s flagship affiliate, CheilJedang, fell from 376,500 won at the beginning of the year to 273,500 won. Demand for processed foods contracted in the wake of an economic downturn, and the continuation of cost pressures.
In addition, CJ CGV recently announced a 570 billion won capital increase, causing the stock price to plummet. The share price of CJ, the holding company of the CJ Group, also fell. CJ will participate in the capital increase through shareholder apportionment.
Shinsegae Group’s market capitalization also recently declined by 17 percent from 6.3 trillion won at the beginning of the year to 5.3 trillion won. E-Mart’s stock price fell from 94,800 won at the beginning of the year to 78,400 won recently. E-Mart has a large share of Shinsegae Group’s market capitalization. Shinsegae’s stock price has also lost steam due to a slowdown in consumption.
The market caps of GS Group and Lotte Group are also down 12 percent and 5 percent, respectively. The market caps of Kakao and KT Group have also been waning since the beginning of this year.
On the other hand, the market capitalizations of groups with main businesses that include secondary batteries and semiconductors have surged. The largest increase in market capitalization so far this year was marked by POSCO Group. POSCO’s market capitalization soared by 73.4 percent from 41.94 trillion won at the beginning of this year to 72.71 trillion won recently.
In particular, the stock price of POSCO Future M, a POSCO Group affiliate that makes cathode materials for secondary batteries, ballooned. The stock price of POSCO Future M was in the 190,000 won range at the beginning of the year but recently jumped to 370,000 won, doubling the company’s market capitalization.
LG Group’s market capitalization ascended by 20 percent due to a secondary battery boom and the strong business performances of its home appliance business. The stock price of LG Energy Solution, a secondary battery company, climbed from 446,000 won at the beginning of this year to 563,000 won recently.
The market capitalizations of Samsung Group and SK Group also inflated by around 20 percent each as semiconductor stock prices rose. The stock price of Samsung Electronics went up from 55,000 won at the start of the year to 71,600 won while that of SK hynix from 70,000 won to 110,000 won over the same period.
Hyundai Motor Group’s market capitalization swelled from 100 trillion won at the beginning of this year to 122 trillion recently as its global auto sales increased.