SK in hot pursuit of Hyundai for No. 2 spot in chaebol list: report

SK Group is fast catching up with South Korea’s second-largest conglomerate Hyundai Motor Group, even as Samsung Group continued to maintain the top spot last year with a sizable lead over them, according to a report on Wednesday.

Samsung Group has remained the largest conglomerate in terms of fair value, revenue, operating profit and operating margin for the past five years, local corporate research center Korea CXO Institute said.

Fair value represents the estimated worth of various assets and liabilities that must be listed in a company’s financial statement.

Samsung Group’s fair value has reached 414 trillion won ($352 billion), compared to 327 trillion won in 2015. It jumped to 351 trillion won, 363 trillion won and 399 trillion won in the next three years.

Samsung Electronics led the growth, accounting for 52.8 percent of the group’s total fair value, the report added.

Hyundai Motor Group’s fair value marked a relatively gentle growth. In 2015 it amounted to 180 trillion won, rising in the next three years to 193 trillion won, 218 trillion won and 222 trillion won. However, it went down to 220 trillion won last year.

SK Group, in the meantime, has been closing in on Hyundai Motor Group at a fast pace. In 2015, its fair value was 152 trillion won, which soared to 217 trillion won last year.

The report noted that SK Group could surpass Hyundai Motor Group within a couple of years if it grows at the current pace.

The semiconductor unit of SK Group has been one of its most lucrative subsidiaries, the report explained.

In 2017, the gap between the net asset value of Hyundai Motor’s automobile unit and SK Group’s semiconductor unit was 38.5 trillion won, but it reduced to 8.8 trillion won in 2019.

The net asset value of SK hynix, SK Group’s semiconductor unit, grew to 61 trillion won in 2019, compared to 25 trillion won in 2015. While that of Hyundai Motor, the cash cow of the Hyundai Motor Group, has remained at around 70 trillion won since 2017.

In terms of sales, SK Group has already surpassed Hyundai Motor Group. In 2018, sales of SK Group reached 184 trillion won, compared to Hyundai Motor Group’s 170 trillion won.

In terms of operating profit, SK Group has also outpaced Hyundai Motor Group. In 2017, however, SK Group’s operating profit doubled to mark 22 trillion won, surpassing Hyundai Motor Group’s 8 trillion won. In 2016, SK Group posted an operating profit of 10 trillion won, following Samsung Group (17 trillion won) and Hyundai Motor Group (11 trillion won).

In 2018, the operating profit of SK Group continued its upward trend to post 29 trillion won.

Samsung Group’s operating profit also soared to 42 trillion won in 2017 and 51.8 in 2018.

Meanwhile, the report predicted LG Group which is in fourth place will retain its position, unless there are significant changes in its business profile.

By Shim Woo-hyun (ws@heraldcorp.com)