-
- SK Innovation Powers Ahead with Rebalancing Amid Market Confidence
- SK Innovation to Test Market Confidence with First Bond Sale Since Merger with SK On and SK Enmove SK Innovation is set to confirm positive sentiment from financial markets through its first bond issuance following the merger of SK On and SK Enmove.
For Jang Yong-ho, SK Innovation’s Executive Vice President, the move is expected to ease some of the pressure from ongoing rebalancing efforts, including the sale of non-core assets.
According to the company on August 26, SK Innovation will conduct a demand forecast on August 27 for a corporate bond worth KRW 300 billion (US$ 208.6 million). Depending on investor interest, the issuance could be expanded up to KRW 600 billion (US$ 417.2 million). The purpose of the bond sale is to repay existing debt.
The deal carries symbolic weight as it marks the first bond issuance since the company announced plans at the end of June to boost corporate value through the merger of SK On and SK Enmove. Market sentiment appears favorable, with ratings agencies maintaining SK Innovation’s bond rating and outlook at “AA, Stable,” despite its deteriorating financial soundness.
This credit rating stability is expected to further ease the burden on Jang. SK Innovation’s financial struggles were evident in the first half of the year, when its interest coverage ratio fell below zero due to operating losses in its core petrochemical business. A ratio below one means the company cannot cover financial costs with operating profit. The figure had already fallen to 0.2 last year.
At the end of June, the consolidated debt ratio stood at 202.6%, and the net debt dependence ratio was 34.9%, both up from 178.8% and 28.1% at the end of last year.
As a solution to improve its financial structure, SK Innovation decided last year to bring SK E&S into the company as a company-in-company (CIC). SK E&S, known as a “cash cow” within the group thanks to its city gas operations, has since delivered visible benefits, contributing to the more favorable market view of SK Innovation.
On August 22, Korea Ratings said in a report, “SK Innovation, in addition to its traditional businesses, is expected to maintain a certain level of profit generation capacity through the inclusion of SK E&S. The company will likely be able to manage financial pressure with increased cash generation and capital reinforcement following the merger.”
Alongside these structural changes, Jang has accelerated financial improvements through the sale of non-core assets. This year, SK Innovation has worked to secure liquidity through asset securitization in SK E&S, while also pushing for the sale of SK Geocentric’s U.S. ethylene acrylic acid (EAA) and polyvinylidene chloride (PVDC) businesses, as well as its French packaging business. These assets were acquired in 2017 and 2020 for around KRW 850 billion (US$ 591.1 million).
At the time, SK Geocentric (then SK Global Chemical) had positioned the high-value packaging materials business as a next-generation growth driver. However, the company now faces difficulties from oversupply pressures originating in China.
In July, SK Innovation also decided to sell the headquarters building and site of Cowon Energy Service, a city gas subsidiary located in Daechi-dong, Gangnam-gu, Seoul, for KRW 505 billion (US$ 351.3 million). The property is considered highly valuable due to its proximity to prestigious school districts and strong local infrastructure.
In addition, SK Innovation is in talks to sell an NCC facility in the Ulsan Industrial Complex to Daelim Industrial (Daehan Yuhwa) as a countermeasure against the slowing petrochemical sector. The urgency is heightened by S-Oil’s nearing completion of its large-scale Shaheen NCC project, as well as the government’s recent announcement of restructuring measures encouraging voluntary reductions in NCC capacity by petrochemical firms.
An SK Innovation official said, “Executive Vice President Jang has consistently emphasized rebalancing and the sale of non-core assets. Beyond the ongoing discussions, we are continuously reviewing diverse options to make use of the company’s assets.”
Jang also faces the need for speed in rebalancing. The outlook for SK On, which carries the responsibility of preparing for the upcoming electric era, remains uncertain in the short term.
SK On is burdened by both a temporary slowdown in EV demand and heavy capital expenditures for facility investments. In its August 22 report, NICE Ratings maintained SK Innovation’s credit rating but warned, “The battery division continues to face high investment burdens. While the scale of Advanced Manufacturing Production Credit (AMPC) benefits in the U.S. is expected to grow with new facility operations, uncertainties remain due to the suspension of U.S. EV subsidies from late September.”
Since taking office, Jang has consistently stressed that rebalancing is a matter of survival. At the June corporate value briefing, he said, “We will reduce more than KRW 1.5 trillion (US$ 1.04 billion) of debt within this year and further cut net debt in 2026. Portfolio rebalancing is not optional but an essential task if SK Innovation is to raise its corporate value.”
#SKInnovation #SKOn #SKEnmove #corporatebonds #creditrating #restructuring #noncoreassets #petrochemical #EVbattery #financialstrategy
-
- Rhee Weighs Timing of Rate Cut as Fed Shifts, Housing Heats
- Bank of Korea Governor Rhee Chang-yong Relieved by Fed’s Policy Shift, but Housing and Household Debt Remain Key Concerns Bank of Korea Governor Rhee Chang-yong has felt some relief on the burden of further interest rate cuts as the U.S. Federal Reserve (Fed) signaled a shift toward monetary easing.
However, with the continued rise in metropolitan housing prices and household debt, concerns remain over the timing of additional rate cuts.
According to market analysis on the 25th, the Bank of Korea is widely expected to keep its key interest rate unchanged at 2.50% during Thursday’s Monetary Policy Committee (MPC) meeting.
Kim Ji-na, a researcher at Eugene Investment & Securities, said, “The urgency for rate cuts to stimulate the economy has lessened, and although the pace of housing price and household debt growth has slowed, it has not reversed.” She added, “We revise our outlook to expect a unanimous decision to keep the rate unchanged at the August MPC meeting, citing financial stability.”
Kim had previously viewed the July decision to hold rates as a “temporary pause,” projecting a higher chance of a rate cut in August. But in her latest report, she revised her stance.
Shin Eol, a researcher at SangSangIn Securities, also forecast that the August MPC will unanimously decide to maintain the current rate, while emphasizing the need to adjust the pace of monetary policy.
For now, the domestic economy is showing signs of recovery, aided by U.S. trade negotiations, as well as the Lee Jae-myung government’s execution of an additional supplementary budget. This has given the central bank room to wait until after the Fed’s expected rate cut in September before making its move.
Still, concerns persist that rate cuts could once again fuel increases in housing prices and household debt.
Following the June 27 mortgage lending restrictions, the pace of apartment price increases in Seoul has slowed somewhat. But transaction volumes are rising in the metropolitan area, and housing prices in major cities outside Seoul—where regulations have less impact—continue to climb.
According to the Korea Real Estate Board, apartment prices in Seoul rose by 0.09% in the third week of August from the previous week, marking 29 consecutive weeks of gains.
Household debt remains high despite government restrictions slowing its growth. In the second quarter, mortgage loans increased by KRW 14.9 trillion (US$ 10.4 billion), bringing the total household debt balance to KRW 1,952.8 trillion (US$ 1.36 trillion)—the largest figure since statistics began in the fourth quarter of 2002.
Ahn Jae-kyun, a researcher at Korea Investment & Securities, noted, “Since early August, apartment transactions in Seoul have picked up, and with slight declines in benchmark lending rates such as COFIX, housing price growth could accelerate again by late August or early September.”
He added, “Since both arguments for rate freezes and cuts exist, data will play a decisive role in the August MPC meeting. Household debt stability is critical for financial stability, and given that more confirmation is needed, I expect the August MPC to hold rates steady.”
Governor Rhee has also heightened his vigilance over the potential rise in housing prices and household debt.
At a parliamentary committee hearing on August 19, Rhee gave a positive outlook for an economic rebound in the second half of the year, but cautioned that the housing market required more monitoring.
“Following the June 27 measures, which capped mortgage loans in the metropolitan area at KRW 600 million (US$ 417,000), overheating in the housing market has eased. However, housing prices in certain areas of Seoul continue to rise, so it is necessary to see if this trend stabilizes,” Rhee said.
He stressed again that the Bank of Korea would closely monitor financial stability before deciding on its policy direction.
President Lee Jae-myung’s recent call for a second round of domestic demand stimulus, along with the possibility of a third supplementary budget this year, could also affect MPC decisions as the 2026 budget is drafted.
With the government supporting growth through fiscal policy, monetary policy may lean more toward ensuring stability in the housing market and household debt.
Park Hyung-jung, a researcher at Woori Bank, told Business Post, “The Bank of Korea has paused rate cuts since the new administration took office, watching the impact of fiscal measures. Given the housing market concerns, the central bank is more likely to cut rates once, around the fourth quarter, rather than in August.”
Still, Rhee has been relieved by the Fed’s signal of a rate cut, which reduces the burden of acting alone.
Currently, the interest rate gap between Korea and the U.S. stands at 2.0 percentage points, the largest on record. If the Fed maintained its hawkish stance, the Bank of Korea would have found it difficult to lower rates this year, regardless of timing.
A wider interest rate gap could diminish Korea’s investment appeal and drive foreign capital outflows. Maintaining a certain level of stability in the Korea-U.S. rate differential is also critical for exchange rate stability.
Fed Chair Jerome Powell, in his speech at the Jackson Hole symposium in Wyoming on August 22, said, “Policy is in a constrained space, and as the outlook and balance of risks change, we may need to adjust our stance.” This shift from his previous hawkish tone reinforced expectations for a September rate cut.
#BankofKorea #RheeChangyong #FederalReserve #interestrate #ratecut #housingmarket #householddebt #LeeJaemyung #monetarypolicy #Koreaneconomy
-
- Chung Eui-sun Pushes Boston Dynamics Growth Ahead of IPO for Succession
- Chung Eui-sun, Chairman of Hyundai Motor Group, is expected to personally lead the expansion of the humanoid robot business at Boston Dynamics, the group’s U.S. robotics subsidiary.
Speculation is growing that Chung may sell part of his stake in Boston Dynamics after its listing to secure succession funds needed for Hyundai’s governance restructuring. In this context, many view his direct involvement in boosting Boston Dynamics’ corporate value as a strategic move.
Chung is set to join the board of directors of the U.S.-based Robotics and AI Institute (RAI), which he co-founded with Boston Dynamics’ founder. Through this role, he will directly oversee key business and development issues.
According to industry sources on the 20th, Chung’s participation on the RAI board signals his active effort to create synergy with Boston Dynamics.
RAI was founded in 2022 by Boston Dynamics founder Marc Raibert, with Hyundai Motor Group taking part as an investor.
Hyundai Motor’s 2025 semiannual report shows that on May 30, the board approved Chung’s concurrent position as an RAI director. Until now, Chung has sat on the boards of domestic affiliates such as Kia and Hyundai Mobis, but this marks his first participation on the board of an overseas affiliate.
Business Post confirmed that RAI is currently forming its board, and once the process is complete, Chung will formally begin his activities as a board member.
RAI is closely linked with Boston Dynamics. Hyundai Motor Group acquired Boston Dynamics in 2021 and established RAI the following year.
Collaboration between the two organizations has recently accelerated. In February, Boston Dynamics signed a partnership with RAI to develop reinforcement learning-based humanoid robots, and in March, they unveiled a demo version of their joint work through a video release.
While Boston Dynamics had long highlighted its four-legged robot “Spot” as its flagship product, the company is now shifting its focus to humanoid robot “Atlas.” With Atlas set to become the centerpiece of its portfolio, RAI’s role as the technological brain is becoming increasingly critical.
In March, Hyundai Motor Group announced plans to invest US$ 21 billion (KRW 29.4 trillion) in the United States, part of which will go toward reinforcement learning-based intelligent robot development through collaboration between Boston Dynamics and RAI.
The success of Boston Dynamics’ humanoid business carries significant meaning for Chung. Strengthening its competitiveness before the company goes public is key to raising its valuation.
Chung faces the challenge of unwinding Hyundai’s cross-shareholding governance structure and must significantly increase his stake in Hyundai Mobis, which effectively functions as the group’s holding company.
Currently, Chung holds just 0.33% of Hyundai Mobis shares, the lowest among his group affiliates. Even when combined with honorary chairman Chung Mong-koo’s shares, the total is only 7.71%.
Acquiring a larger stake requires massive funds. As of the 20th, Kia holds 17.90% of Hyundai Mobis, Hyundai Steel 6.00%, and Hyundai Glovis 0.71%. If Chung were to acquire all these stakes, he would need KRW 6.8 trillion (US$ 4.7 billion), based on the closing price of KRW 302,000 per share on the 19th.
The most likely way to raise the necessary funds is through the sale of Chung’s personal stake in Boston Dynamics after its IPO. When Hyundai acquired the company, Chung personally invested KRW 238.9 billion (US$ 166.1 million) to secure a 21.9% stake.
It was highly unusual for a group chairman to participate in a corporate acquisition with personal funds. At the time, observers suggested that Chung made this investment to secure financial resources for the group’s governance overhaul.
Boston Dynamics was initially expected to go public in the U.S. stock market in the first half of this year. However, the IPO was reportedly delayed as the company’s valuation fell short of expectations.
Still, postponing the listing indefinitely is not an option for Chung. Market watchers believe that once valuations improve, Boston Dynamics will move quickly toward IPO.
An industry insider commented, “Since Chairman Chung invested his personal funds, the valuation Boston Dynamics receives at IPO is a critical issue. By joining the RAI board, he is expected to focus on rapidly boosting the company’s value.”
#Hyundai #ChungEuisun #BostonDynamics #humanoid #robotics #RAI #IPO #HyundaiMobis #succession #AI
-
- Hyundai Eyes F1 as Chung Eui-sun Races to Elevate Genesis
- Will a car made by Hyundai Motor Company ever race on a Formula 1 World Championship (F1) circuit?
With the recent success of the film “F1: The Movie,” public interest in Formula 1 racing is surging in South Korea. As a result, speculation is growing over whether Hyundai Motor Company will eventually enter the world of F1.
Chung Eui-sun, Chairman of Hyundai Motor Group, is known for his deep passion for motorsports. He has already established the Genesis Magma Racing (GMR) team and is preparing to compete in the 24 Hours of Le Mans endurance race, leading to expectations that an F1 debut may be on the horizon.
According to industry insiders on July 27, Chung’s strong push into motorsports, despite its high costs, is part of a strategic effort to establish Genesis as a luxury brand in Europe.
Starting next year, Chung plans to aggressively pursue victories in prestigious motorsport events. Hyundai will compete in the 24 Hours of Le Mans Hypercar class with a racecar built entirely in-house, including the engine.
The 24 Hours of Le Mans is one of the world’s three most renowned races. It’s a grueling endurance event where drivers race for 24 hours on a 14-kilometer circuit to complete the most laps. Even long-time competitors like Porsche and Ferrari cannot guarantee a finish, making it one of the toughest races in motorsport.
More than 300,000 fans visit Le Mans each year to watch the race live, while over 100 million people tune in via television.
Because the race demands both extreme durability and high speed, winning the 24 Hours of Le Mans alone can demonstrate a brand’s competitiveness. That is why Chung is entering the Genesis Magma Racing Team into the Hypercar class of this race.
Despite Genesis earning numerous accolades in European competitions, its sales figures remain stagnant. This is largely because the brand has not yet achieved strong recognition as a luxury marque in Europe.
Establishing a luxury brand in Europe is no easy task. Some experts argue that winning a major motorsport competition is the most definitive way to achieve this, as it elevates both prestige and awareness.
All of Europe’s leading luxury automakers—Mercedes-Benz, BMW, Audi, Ferrari, and Porsche—have earned their reputations in part through motorsport victories.
Industry estimates suggest that even developing a standard new car costs hundreds of billions of Korean won. Developing a racecar could easily require investments exceeding KRW 1 trillion (US$ 695 million).
Chung’s interest in motorsports and his vision of transforming Genesis into a global luxury brand appear to justify the massive investments in Le Mans racing.
However, there are mixed opinions on whether Chung will go so far as to operate an F1 team.
Rumors have long circulated in the industry that Hyundai is considering acquiring an F1 team. Recently, there was even speculation that Hyundai might acquire the Alpine F1 Team. But so far, Hyundai has not issued any official statements on the matter.
One major obstacle to entering F1 is the enormous cost of team operations, which can amount to hundreds of billions of Korean won each year.
Although the Fédération Internationale de l'Automobile (FIA), which governs F1, has introduced a budget cap, the cap only applies nominally to US$ 200 million (KRW 276.3 billion) per year. This excludes driver salaries and engine development costs. In reality, a team would need to invest between KRW 300 billion to 400 billion (US$ 208.6 million to 278.2 million) annually just to remain competitive in the mid-to-upper ranks.
Spending these massive sums does not guarantee results. Automakers like Honda, Toyota, and BMW all attempted to compete in F1, only to withdraw due to disappointing performance.
Toyota, for example, spent more than KRW 2 trillion (US$ 1.4 billion) between 2002 and 2009 in F1 without securing a single victory before withdrawing. Honda won once in 2006 but exited the sport by 2008.
Power unit development also poses a major hurdle. In F1, a power unit refers to the complete hybrid propulsion system, which is more complex than a traditional engine. Currently, only four manufacturers—Mercedes, Ferrari, Honda, and Renault—supply power units to F1 teams. The 10 existing F1 teams must choose from among these four.
If Hyundai were to enter F1, it would likely opt to develop its own power unit to reinforce its brand value, rather than using a third-party supplier. However, developing a power unit requires advanced technology, substantial time, and massive capital.
Nevertheless, many believe Chung is unlikely to give up on F1 ambitions.
F1 introduced hybrid power units in 2014. The current systems combine gasoline engines with electric motors. From next year, a new power unit system will place even greater emphasis on electric motors.
Some analysts point out that Hyundai has globally recognized expertise not only in electric vehicles but also in hybrid systems, which could give it an edge in power unit development.
The fact that Chung’s nephew, Shin Woo-hyun, competed in the 2023 Formula 3 Championship (F3) has also fueled expectations. Shin is the grandson of honorary Hyundai Motor Group Chairman Chung Mong-koo and nephew of Chairman Chung Eui-sun.
F3 is considered the third tier of F1. Strong performance in F3 leads to F2 opportunities, and standout F2 drivers may advance to F1, where only 20 seats exist across 10 teams, with each team fielding two drivers.
Industry insiders consider Shin one of South Korea’s most promising F1 hopefuls. He is currently racing in the Euroformula Open series, where he has won twice and is a top contender for the championship.
#Hyundai #F1 #ChungEuisun #Genesis #LeMans24 #motorsports #luxurybrand #HyundaiF1 #ShinWoohyun #hybridpowerunit
-
- Kim Taek-jin’s Bold Global Bet: Aion 2 and LLL Return
- “NCSoft’s top priority right now is making a strong leap toward becoming a global game company.”
This is the goal announced by Kim Taek-jin, CEO of NCSoft, during the company’s 2022 general shareholders' meeting.
Kim's ambition to turn NCSoft into a global company is nothing new. Since the company’s early days, he has continuously sought to enter the global gaming market, particularly targeting North America and Europe—the heartlands of the industry.
Kim established NC West, a local North American subsidiary, and entrusted its leadership to his most trusted associate, his wife Yoon Song-yee, the former chairperson of the NC Cultural Foundation. He also actively pursued overseas expansion through NCSoft’s flagship IPs such as Lineage and Aion.
This effort yielded some success with titles like Guild Wars 2, and in 2023, NCSoft established a new North American entity called NC America to further strengthen its global business foundation.
At one point, Kim even explored acquiring Electronic Arts, the world’s largest game publisher, alongside the late Kim Jung-ju, founder of Nexon. Though the deal ultimately fell through, it remains a notable example of Kim’s genuine commitment to the North American and European markets.
NCSoft has experienced multiple setbacks in its attempts to expand into these markets.
Lineage, NCSoft’s flagship IP, failed to gain traction in the West, while Blade & Soul was seen as too heavily influenced by Eastern aesthetics to appeal broadly in North America and Europe. Aion achieved some popularity, but its momentum faded over time.
Still, Kim remains committed to his vision of “Global NCSoft.” Two key titles seen as the twin engines to realize that vision are Aion 2 and LLL.
△ Will Aion 2 Succeed Again in North America and Europe?
Aion is one of NCSoft’s representative MMORPGs and, apart from Guild Wars 2, the IP that received the highest acclaim in Western markets.
When it launched in 2009, Aion achieved pre-orders of 450,000 and surpassed 1 million units sold in North America and Europe, making it the first Korean-made game to sell over a million copies in the West.
The game also earned strong praise at major gaming events, winning “Best Online Game” at Germany’s Gamescom and being named “Best MMO” at PAX (Penny Arcade Expo), the largest game show in North America.
In terms of revenue, Aion generated more than KRW 100 billion (US$ 69.6 million) in North America and Europe, proving that Korean games could achieve meaningful profits overseas.
Ahead of the game’s release in 2008, Kim Taek-jin said, “Aion was developed with the global market in mind from the planning stage,” adding, “Next year will mark the beginning of Aion’s global expansion.”
The newly developed game Aion 2 builds on this successful IP. NCSoft is finally bringing out its most globally viable franchise.
The company plans to launch Aion 2 first in Korea and Taiwan during the fourth quarter of this year, followed by expansion into major global markets, including North America and Europe, by the third quarter of next year.
NCSoft is also preparing a localization strategy that includes multilingual support and region-specific content optimization to enhance the user experience in each market.
Industry insiders expect that if Aion 2 succeeds, it could not only boost NCSoft’s global revenue but also enhance the overall image of the Korean gaming industry abroad.
△ LLL: A Post-Apocalyptic Shooter Targeting Western Gamers
LLL is a AAA third-person shooter game that NCSoft aims to release in the second half of this year.
It marks a significant shift for NCSoft, which has historically focused on MMORPGs, and has generated high expectations internally as a sign of transformation.
The looter-shooter genre to which LLL belongs is particularly popular in North America and Europe. The genre includes global mega-hits like Destiny 2, the Borderlands series, The Division, and Warframe.
Because the genre appeals to male gamers in their teens to 30s, LLL could help NCSoft broaden its user base beyond the older demographic that dominated its previous titles.
LLL’s post-apocalyptic setting is another point of interest.
The game features a unique world where a ruined Seoul, 10th-century Byzantium, and a 23rd-century future coexist. It incorporates classic post-apocalyptic elements like ruined cities, mutants, and advanced weaponry.
This theme has proven globally popular in hits like The Last of Us and Fallout, establishing itself as a strong formula for success.
By reflecting these trends, LLL could help NCSoft move beyond its image as a developer of only fantasy MMORPGs and establish a new identity in the North American and European markets.
However, some experts caution that the competition in this genre is fierce.
The looter-shooter market is dominated by major global titles mentioned above. If the definition is broadened to include hero shooters, the competition becomes even more intense, with titles like Blizzard Entertainment’s Overwatch 2 and Riot Games’ Valorant leading the charge.
In July of last year, Nexon also entered this market with The First Descendant. Despite strong initial interest, it ultimately struggled to overcome the dominance of existing competitors.
△ Kim Taek-jin and NCSoft Take Another Global Gamble with Aion 2 and LLL
Since Guild Wars 2, NCSoft has not released a major hit in the North American and European markets. Now, with Aion 2 and LLL as twin pillars of its strategy, the company is aiming for a new leap forward in the global arena—a challenge that embodies both CEO Kim Taek-jin’s long-held dream and the company’s future direction.
NCSoft is taking a comprehensive localization approach, adapting scenarios, UI, and character design to Western tastes, and expanding into new genres in an effort to move beyond its “Lineage-like” legacy and tap into new markets.
An industry insider commented, “Compared to competitors like Nexon, Netmarble, and Krafton, NCSoft still has a relatively low share of global revenue,” adding, “While Throne and Liberty received a decent reception from global gamers recently, we’ll have to see whether Aion 2 and LLL can follow suit.”
#NCSoft #KimTaekjin #Aion2 #LLL #MMORPG #GlobalGaming #ShooterGame #GuildWars2 #Gamescom #PostApocalypticGaming
-
- Yang Leads KB Toward KRW 6 Trillion Profit, Rewriting Value Strategy Ask ChatGPT
- Yang Jong-hee, Chairman of KB Financial Group, is expected to continue leading the financial group to record-breaking earnings this year.
KB Financial Group posted a net profit of KRW 3.44 trillion (US$ 2.4 billion) in the first half of the year, setting a new semiannual record. Following its achievement last year as the first Korean financial holding company to surpass KRW 5 trillion (US$ 3.5 billion) in annual net profit, analysts now expect it will soon break the KRW 6 trillion (US$ 4.2 billion) mark.
Given the scale of its share buyback and cancellation plan in the second half, the company’s total shareholder return ratio for the year is also expected to exceed 50%, possibly setting an all-time high for Korean banking stocks.
According to KB Financial on July 24, its consolidated net profit attributable to controlling shareholders reached KRW 1.74 trillion (US$ 1.2 billion) in the second quarter of 2025.
This represents a 0.3% increase from the same period last year (KRW 1.73 trillion), which had already marked the highest quarterly earnings on record. The result surprised market watchers, who had predicted a slight decline due to base effects from last year.
This quarter’s performance is even more meaningful considering it includes a KRW 130 billion (US$ 90.4 million) reversal of provisions related to compensation for losses on Hong Kong H Index equity-linked securities (ELS), and came amid a difficult business environment due to interest rate cuts.
KB Financial also saw its group’s net fee and commission income rise 12.2% year-on-year, surpassing KRW 1 trillion (US$ 695 million) for the first time in a quarter. This helped offset a 3.7% drop in net interest income.
Beyond traditional interest income, growth in bancassurance sales commissions, securities brokerage fees, and asset management fees contributed to the strong results.
As a result, KB Financial’s consolidated net profit for the first half of 2025 reached KRW 3.44 trillion (US$ 2.4 billion), up 23.8% from KRW 2.77 trillion (US$ 1.9 billion) a year earlier.
Barring major disruptions in the second half, the company’s annual net profit is expected to reach between KRW 5.7 trillion and 5.8 trillion (US$ 4.0–4.1 billion). According to FnGuide, prior to the earnings release, analysts had estimated KB Financial’s 2025 net profit at around KRW 5.6 trillion (US$ 3.9 billion), but the second-quarter result already beat that by about KRW 100 billion (US$ 69.5 million).
Expectations are rising even higher considering that KB Financial had absorbed more than KRW 600 billion (US$ 417.3 million) in one-off expenses last year due to ELS compensation.
In his first year as chairman, Yang achieved the unprecedented milestone of KRW 5 trillion in net profit, and now the company appears on track to reach KRW 6 trillion much sooner than anticipated.
If KB Financial reaches KRW 6 trillion in annual net profit, it will set yet another record in the history of Korean financial holding companies.
Ten years ago, in 2015, the combined annual net profit of the four major financial groups—KB, Shinhan, Hana, and Woori—first surpassed KRW 6 trillion, reaching KRW 6.1 trillion (US$ 4.2 billion). Now, KB Financial alone is on the verge of achieving that figure.
Under Chairman Yang's leadership, KB Financial is solidifying its position as Korea’s leading financial group.
In 2015, KB posted annual net profit of KRW 1.73 trillion (US$ 1.2 billion), trailing Shinhan Financial Group’s KRW 2.37 trillion (US$ 1.7 billion). The two groups have since competed closely for the top spot in net earnings. However, since Yang’s appointment, KB is expected to retain its lead over Shinhan for a second consecutive year.
Chairman Yang is also making steady progress with value enhancement strategies such as shareholder returns, supported by stable earnings and capital ratios.
Alongside the earnings announcement, KB Financial revealed a KRW 850 billion (US$ 591.2 million) share buyback and cancellation plan for the second half of the year. This would push the company’s total shareholder return ratio for 2025 above 50%.
That marks a significant increase from the 39.8% return ratio in 2024.
NH Investment & Securities analyst Jung Joon-seop noted in a prior report, “Assuming the buyback in the second half reaches KRW 700–800 billion, KB Financial’s total shareholder return ratio will likely hit 54% in 2025.” He added, “A 54% return ratio is the highest ever among Korean bank stocks and breaks through the psychological barrier of 50%, which is highly meaningful.”
KB Financial CFO Na Sang-rok also commented during the earnings conference call, “With the additional KRW 850 billion buyback, our total shareholder return this year will expand significantly to KRW 3.01 trillion (US$ 2.1 billion),” adding, “Depending on the final net profit, we expect to achieve a record-high shareholder return ratio.”
None of the four major financial groups has yet exceeded the 50% mark in shareholder return ratio. Chairman Yang is being recognized for not just meeting value enhancement goals but setting new standards.
Interest in KB Financial’s shareholder return strategy dominated the day’s conference call, with securities analysts asking multiple questions about future plans and outlook.
In response, KB Financial’s executives expressed confidence in the company’s fundamentals and capital management capabilities. They emphasized that any excess capital above the common equity tier 1 (CET1) ratio of 13% would be used for shareholder returns, and pledged to continue expanding returns. They also said they are considering reducing dividends per share.
As of the end of the first half of 2025, KB Financial’s CET1 ratio stood at 13.74%.
At the regular general shareholders’ meeting in March, Chairman Yang stated, “We will lead innovation and change half a step ahead of others,” adding, “KB Financial will work to solidify its standing as Korea’s leading financial group, not just in financial results but in enhancing corporate value.”
#KBFinancial #YangJonghee #netprofit #Koreanbanking #recordearnings #shareholderreturn #financialgroup #CET1 #valueupstrategy #financialresults2025
-
- SK Hynix CEO Vows to Lead HBM4 Amid Fierce Rivalry
- SK Hynix Confirms Market Dominance with Record Quarterly Earnings from AI Memory
SK Hynix has proven its dominance in the high-bandwidth memory (HBM) market for artificial intelligence (AI) applications by posting its highest-ever quarterly earnings in the second quarter of 2025.
While some market watchers predict that the competition will intensify with the sixth-generation HBM4, making it difficult to maintain the current high profitability, SK Hynix remains confident in its ability to boost earnings through its competitive edge in the HBM business not only in the second half of this year but into 2026 as well.
The company pointed out that its accumulated technological prowess and customer-centric corporate culture cannot be easily replicated by competitors.
On July 24, SK Hynix announced that its consolidated operating profit for the second quarter of 2025 reached KRW 9.21 trillion (US$ 6.4 billion), with an operating margin of 41%, setting a new record for quarterly profit.
This represents a 68% increase from Q2 2024 and slightly exceeds the market consensus of KRW 9.06 trillion (US$ 6.3 billion). The figure is more than double the Q2 operating profit of rival Samsung Electronics, which posted KRW 4.6 trillion (US$ 3.2 billion), solidifying SK Hynix’s leadership in AI memory.
During the earnings conference call, an SK Hynix official explained, “In Q1, customers were cautious with their inventory levels, but rising uncertainties related to U.S. tariff policies led them to shift strategies to secure adequate stock. As a result, we saw a significant increase in orders from key customers who had previously held low inventories.”
The company also expressed confidence in its performance for the second half of the year.
While some have raised concerns about a potential oversupply of HBM, SK Hynix believes a sharp decline in demand is unlikely, given that major customers are preparing to launch new products.
The company reaffirmed its goal of doubling HBM sales revenue this year compared to the previous year.
NVIDIA is set to release its AI chip “Blackwell Ultra” in the second half of 2025, and SK Hynix’s 12-layer HBM3E will be used in the chip.
U.S. tech giants are also ramping up AI investments.
On July 23 (local time), Google announced during its Q2 earnings report that it had raised its capital expenditure forecast for the year from US$ 75 billion to US$ 85 billion, driven by strong demand for its cloud and AI services, necessitating further investment.
As a result, shares of major U.S. semiconductor firms, including NVIDIA, AMD, and Broadcom, surged in after-hours trading on July 23 (local time).
In response to rising AI semiconductor demand, SK Hynix also announced plans to increase its capital expenditures this year, particularly for HBM, beyond its original plans. With visibility into HBM supply secured through 2026, the company determined that preemptive investment in production facilities is necessary.
Kwak Noh-jung, CEO of SK Hynix, recently met with OpenAI CEO Sam Altman in San Francisco alongside SK Group Chairman Chey Tae-won to discuss cooperation on AI infrastructure investment and semiconductor supply.
SK Hynix is also focusing on maintaining its competitive edge in HBM4 next year.
A company representative stated, “We will prepare HBM4 production according to the timing required by our customers. The reason we've been successful with HBM so far is because we take a customer-oriented approach from product development to mass production—a corporate culture that is not easily copied.”
SK Hynix provided HBM4 samples to customers for the first time in March this year and expects to begin mass production by the end of the year as planned. Samsung Electronics is reported to have delivered its HBM4 samples to customers in Q3 of this year, with mass production likely starting in Q1 2026.
SK Hynix also expressed confidence in maintaining profitability with HBM4.
A recent report by Goldman Sachs projected that the price premium for HBM4 would be around 45% of that of previous generations.
In response, an SK Hynix official said, “We are negotiating to offer HBM4 at the optimal price for our customers while maintaining our current profitability. In the HBM market, the leading supplier has significant negotiating power, and the advantages of early market entry have grown much greater than in the past.”
#SKHynix #AI #HBM #HBM4 #semiconductor #earnings #NVIDIA #Google #OpenAI #memorymarket
-
- Galaxy Z7 Aims for 7M Units Before Apple Enters Foldables
- Samsung Electronics' newly launched Galaxy Z Fold7 and Flip7 (Galaxy Z7 series) are expected to set a new record for pre-orders in the history of the company’s foldable lineup, with projections pointing to over 7 million units shipped this year. This significantly exceeds the early sales volume of previous foldable models.
Acting Head of Samsung Electronics’ DX Division, Roh Tae-moon, is expected to use the Galaxy Z7 series to fend off rising Chinese competitors and solidify Samsung's dominance in the global foldable smartphone market ahead of Apple’s anticipated entry with a foldable iPhone in the second half of next year.
According to multiple industry sources on July 22, the Galaxy Z7 series, unveiled on July 9, is projected to post record-breaking sales.
Ming-Chi Kuo, an analyst at Taiwan's TF International, recently estimated that about 7 million units of the Galaxy Z Fold7 and Flip7 will be shipped over the six months ending in December. This represents a 40% increase compared to the shipment volume of last year's Galaxy Z6 series.
Hana Securities estimated that the Galaxy Z6 series sold 5.21 million units in the six months following its release on July 12, 2023. The Galaxy Z5 series, launched in July 2023, posted sales of 5.76 million units in the same period.
Although shipment volume, which includes inventory, cannot be directly compared to actual sales, the industry consensus is that high-end flagship smartphones like these are usually produced with minimal inventory. As a result, most of the 7 million units shipped are likely to translate into real sales.
In South Korea, the Galaxy Z Fold7 and Flip7 recorded 1.04 million units in pre-orders within just one week—marking the highest pre-order volume since Samsung first launched a foldable smartphone in 2019. The previous record was 1.02 million units for the Galaxy Z Fold5 and Flip5 in 2023.
In India, pre-orders are also surging. According to U.S.-based tech media outlet PhoneArena, 210,000 units of the Galaxy Z Fold7 and Flip7 were sold in just two days of pre-orders, and the total is expected to exceed 400,000 units during the entire pre-order period.
Samsung’s advanced manufacturing technology for ultra-thin foldable phones is considered a key factor behind this spike in pre-orders. The Galaxy Z Fold7 is 26% thinner than the Z Fold6 and weighs only 215 grams. Its performance is comparable to that of the Galaxy S25 Ultra, attracting significant consumer interest.
For Roh Tae-moon, the success of the Galaxy Z7 series carries major significance. Chinese companies are closing in fast in the global foldable smartphone market, and Apple is expected to launch its first foldable device in the second half of next year.
According to market research firm IDC, Samsung held a 32.9% share of the global foldable smartphone market last year, a steep decline from 83.6% in 2021, 79.2% in 2022, and 55.1% in 2023.
This decline reflects the rapid rise of Chinese manufacturers in the foldable sector.
Huawei, which has consistently ranked second since 2020, increased its market share from 9.3% in 2021 to 23.1% in 2024. Meanwhile, Lenovo and Honor posted market shares of 17.0% and 10.4%, respectively, last year, intensifying competition.
Apple is expected to enter the foldable race in the second half of 2026. Given Apple’s dominant brand power in the flagship smartphone market, its debut foldable device is likely to bring significant disruption to the current market landscape.
Kang Min-goo, an analyst at IBK Investment & Securities, projects that Apple will ship between 8 million and 10 million foldable iPhones in 2026, citing Apple’s brand strength, low market penetration of foldables, and hardware differentiation. This would surpass the 7 million units estimated for Samsung’s Galaxy Z7 series this year.
Currently, foldable smartphones account for just 1.4% of total global smartphone sales. Apple’s entry into this niche market is expected to rapidly expand its share. Apple is also expected to differentiate itself by launching a device with a completely crease-free display, unlike current models.
As such, the growing sales of the Galaxy Z Fold7 and Flip7 are seen as crucial for Roh Tae-moon—not only to block the pursuit of Chinese rivals but also to preemptively counter Apple’s market entry.
Some analysts suggest that Apple’s participation could actually expand the entire foldable market, benefiting Samsung as well.
Brian Ma, Vice President at IDC, stated, “Apple’s entry into the foldable market is expected to positively influence growth in this sector,” projecting that global foldable smartphone shipments will increase from 20 million units last year to 45.7 million by 2028.
#Samsung #GalaxyZ7 #foldablephone #RohTaeMoon #Applefoldable #smartphonesales #IDC #Huawei #Flip7 #Fold7
-
- Revised Law Pressures DN Solutions IPO, Kim Sang-hun Faces Listing Dilemma
- Kim Sang-hun, chairman of DN Group, pushed for the initial public offering (IPO) of DN Solutions in the first half of 2025 with the goal of listing the company on the Korea Composite Stock Price Index (KOSPI).
DN Solutions is a second-tier subsidiary under the group’s holding company, DN Automotive.
However, the listing was withdrawn after the company failed to receive a satisfactory valuation during the institutional demand forecast. DN Group now plans to revisit the IPO when market conditions improve.
At the time of the IPO attempt, DN Solutions faced controversy over alleged “duplicate listing.” Although the company dismissed the claim, arguing it did not constitute a duplicate listing, the issue has resurfaced following the passage of a revised Commercial Act in July 2025.
The amendment expands the fiduciary duty of corporate directors from “the company” to “the company and its shareholders.” This provision took effect immediately without a grace period.
Industry and securities market experts note that this amendment lays the legal groundwork for shareholders to take action—including legal claims—against companies pursuing duplicate or split listings that are seen to damage shareholder value.
This puts additional pressure on Chairman Kim regarding DN Solutions’ potential re-listing. Experts argue that even if the IPO is revived, the group must conduct a thorough assessment of how the move could impact DN Automotive’s share price.
A DN Group spokesperson told C Journal, “DN Solutions was a company already available on the market, and since the businesses of the parent (DN Automotive) and the subsidiary (DN Solutions) do not overlap at all, our stance remains unchanged that this is not a duplicate listing.”
◆ What is Duplicate Listing?
A duplicate listing refers to a situation in which both a parent company and its subsidiary—operating in the same or closely related business sectors—are listed on the stock market. This differs from a “split-off listing,” where a company spins off a division into a new entity and lists that new company separately.
The term “duplicate listing” is commonly used in the industry but is not defined by law. The Korea Exchange (KRX) has yet to establish clear standards for determining such cases.
From a corporate standpoint, a duplicate listing can help maximize the valuation of a specific business segment. However, critics argue that it may harm the parent company’s shareholders, who might not benefit from the subsidiary’s growth and may instead bear the brunt of a decline in the parent company’s value.
Duplicate listings have long been cited as a factor contributing to the undervaluation of Korean stocks.
Until now, the Korea Exchange has not strictly blocked such listings. DN Solutions had successfully passed the preliminary screening for listing.
However, in response to the controversy surrounding the listing of LG Energy Solution, the Korea Exchange introduced a regulation limiting the listing of companies spun off via physical division within five years. But this rule only applies to split-off listings, not duplicate listings.
Since 2024, the Korea Exchange has rejected only one duplicate listing case. In April 2025, Oscotec’s attempt to list its subsidiary Genosco was blocked after fierce opposition from Oscotec shareholders, which reportedly influenced the regulator’s decision.
◆ In the Case of DN Solutions
In the stock market, DN Group faced criticism that its 2024 push to list DN Solutions would dilute DN Automotive’s value, leading to a potential drop in its stock price. Critics labeled the move as a duplicate listing.
Indeed, during the last two days of DN Solutions’ demand forecast period (April 22–28), DN Automotive’s stock price fell by 11.34%.
DN Group strongly denied the criticism, arguing that the two companies operate in completely different business sectors and that DN Solutions was not formed through a physical spin-off.
At a press conference on April 25 in Yeouido, DN Solutions CEO Kim Won-jong stated, “DN Automotive’s acquisition of DN Solutions was not intended for merger or synergy purposes, but to pursue a separate growth engine.” He added, “The business domains, strategies, and customers are all completely independent from DN Automotive.”
He also emphasized, “Even during DN Automotive’s investor relations sessions where the IPO of DN Solutions was explained, there were no shareholders of DN Automotive who opposed the plan.”
◆ What Kind of Company Is DN Solutions?
DN Solutions is the rebranded name of the former Doosan Machine Tools. The company was originally founded in 1976 as Daewoo Heavy Industries and later became Daewoo Machinery and then Doosan Infracore. In 2016, MBK Partners acquired the machine tools division from Doosan Infracore and rebranded it as Doosan Machine Tools.
In August 2021, DN Group signed a share purchase agreement with MBK Partners to acquire 100% of Doosan Machine Tools’ shares and completed the acquisition in January 2022.
Through the acquisition, DN Group’s total assets surpassed KRW 5 trillion (US$ 3.5 billion) in 2023, making it subject to public disclosure regulations. As of 2025, DN Group’s total assets stand at KRW 5.623 trillion (US$ 3.9 billion), ranking it 80th among Korea’s business groups.
Within DN Group’s governance structure, DN Solutions is a second-tier subsidiary of DN Automotive. GMT Holdings, a special purpose company established in 2021 to acquire DN Solutions, owns 84.83% of DN Solutions and is in turn a wholly owned subsidiary of DN Automotive.
Chairman Kim Sang-hun had aimed for a May 2025 IPO of DN Solutions. However, after receiving lower-than-expected valuations during the demand forecast, the plan was scrapped.
A DN Group representative told C Journal, “Our plan to revisit the IPO when the global and domestic political environment improves has not changed.”
#DNGroup #DNSolutions #IPO #KOSPI #duplicatelisting #CommercialAct #DNAutomotive #stockmarket #corporategovernance #shareholderrights
