Chaebol Owner Gains

The Hyundai Motor Company’s headquarters in Seoul is located in the Yangjae district, along with the offices of Kia Motors and the two companies’ parent corporation, Hyundai Motor Group. (Photo by Chu via Wikimedia Commons)
The Hyundai Motor Company’s headquarters in Seoul is located in the Yangjae district, along with the offices of Kia Motors and the two companies’ parent corporation, Hyundai Motor Group. (Photo by Chu via Wikimedia Commons)

 

The appraised equity value of Hyundai Motor Group Chairman Chung Mong-koo and his affiliates increased by close to 20 trillion won (US$19.6 billion) between 2010 and this year. The amount increased by approximately 10 trillion won (US$9.8 billion) for the largest stockholders of the SK Group and Samsung Group, too. Meanwhile, the value decreased by at least 1 trillion won (US$982 million) for those of LG, Hanjin, Doosan, and Hanwha.

On Sept. 3, the Market Oversight Commission of the Korea Exchange published its data on the stock valuation and share ratios of the largest shareholders of the 10 major business groups. According to the data, the total market capitalization of the listed subsidiaries belonging to the 10 groups jumped 34.55 percent, from 486.9 trillion won (US$478.0 billion) to 665.1 trillion won (US$652.9 billion) between the end of June 2010 and the end of June 2014. The ratio of the subsidiaries’ market cap to aggregate market value increased from 51.99 percent to 54.72 percent during the same period. The equity of the largest shareholders and affiliated persons including their family members and executive members went up by 25.03 percent to 190.2 trillion won (US$186.7 billion), too.

It was the Hyundai Motor Group that the value of the largest stockholders showed the highest growth. The amount increased from 25.46 trillion won (US$24.99 billion) to 45.028 trillion won (US$44.207 billion) during the period, while the total market value of the group rose by 56.128 trillion won (US$55.104 billion) to 139.795 trillion won (US$137.221 billion).

The SK Group recorded the highest increase in market capitalization. The amount more than doubled, from 37.798 trillion won (US$37.126 billion) to 87.81 trillion won (US$86.19 billion), which can be attributed mainly to the incorporation of SK Hynix in Feb. 2012. The addition of the subsidiary alone boosted the market cap by 34.5 trillion won (US$33.9 billion), while having a positive effect on the share price of SK Telecom and SK.

The stakes of the affiliate persons and chairman Chey Tae-won jumped 11.7 trillion won (US$11.5 billion) during the lst four years, and approximately seven trillion won of it is associated with SK Hynix. The percentage of shareholding of the largest stockholders is 24.23 percent, which is the lowest among the 10 conglomerates.

The market cap of the Samsung Group gained 36.75 percent, or 76.0996 trillion won (US$74.7602 billion), to 282.791 trillion won (US$277.636 billion), and Samsung Electronics’ market cap increment was about 14.3 trillion won (US$14.0 billion). Chairman Lee Kun-hee and the other largest shareowners and affiliate persons owned 29.36 percent of the shares, and their appraised value was 11.4 trillion won (US$11.2 billion) combined.

The appraised value of the LG, Hanjin, and Doosan Groups decreased by 1.5 trillion won (US$1.4 billion), and their market cap slightly decreased compared to four years ago. For example, the Hanjin Group’s market capitalization more than halved from around 10 trillion won (US$9.8 billion) to 4.746 trillion won (US$4.662 billion). Doosan and LG lost 27.54 percent and 4.38 percent each.

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