Accounts for about 70% of Combined OP of Top 10 Firms
The ratio of Samsung Electronics’ operating profit to that of the top 10 sales companies rose from 62.9 percent to 68.6 percent last year. This is because COVID-19 and the resultant economic recession widened the gap between the global industry leader and the rest.
Samsung Electronics is estimated to have increased its operating profit by 29.5 percent to 35.95 trillion won in 2020, when the profits of the other nine are estimated to have increased little or decreased. According to market estimates, SK Innovation turned a loss of two trillion won or so and the profit of Hyundai Motor Group decreased by approximately 1.5 trillion won. Besides, that of POSCO fell from more than 3.36 trillion won to 2.36 trillion won.
The enterprises’ operating margins are showing the same lopsidedness. Last year, their average operating margin was 7.1 percent and that of the nine was 3.3 percent. Hyundai Motor’s margin fell from 3.4 percent to 2.8 percent and Kia Motors’ fell from 3.4 percent to 3 percent. Those of POSCO, Hyundai Mobis and CJ decreased from 5.2 percent to 4.1 percent, from 6.2 percent to 4.9 percent and from 4.5 percent to 4.3 percent, respectively.
The nine enterprises’ combined operating profit was less than half of Samsung Electronics’ operating profit in 2020. That of Hyundai Motor, the runner-up, is estimated at 2,863.5 billion won, about one-12th of Samsung Electronics’. In addition, the profit of Samsung Electronics is estimated at more than 700 percent of that of SK Hynix, the second-largest South Korean semiconductor manufacturer.
This is likely to be repeated this year as the pandemic is unlikely to disappear in the near future. The Korea International Trade Association recently forecast that South Korea’s semiconductor exports would increase 5.1 percent to US$102 billion this year while the overall exports show a decrease of US$50 billion or so. In other words, sluggish exports are likely to continue this year along with increasing semiconductor exports led by Samsung Electronics alone. At present, Samsung Electronics’ market cap is equivalent to no less than 37.4 percent of the KOSPI market cap.