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- HYBE Bets on KATSEYE to Boost Girl Group Success
- Bang Si-hyuk, chairman of HYBE and a former star music producer, played the most significant role in establishing HYBE as a dominant player in the entertainment industry. Thanks to the phenomenal success of BTS, HYBE has become the most valuable K-content company.
However, even Chairman Bang has struggled when it comes to girl groups. HYBE currently manages four girl groups under its various labels, but three of them are experiencing ups and downs.
The underperformance of its girl groups poses a challenge for HYBE as it tries to diversify its portfolio, given that its financial performance relies heavily on boy groups like BTS and SEVENTEEN.
According to the entertainment industry on the 29th, HYBE appears to be attempting a comeback in the girl group arena through "KATSEYE."
KATSEYE is a girl group under HYBE Universal, a joint venture between HYBE and Geffen Records, a subsidiary of Universal Music Group. On the 30th, the group will release a pre-release single titled “Gnarly” from their second EP. HYBE holds a 51% stake in HYBE Universal.
KATSEYE is a multinational girl group created by HYBE with the global market in mind.
This marks their return to official promotional activities about four months after their Christmas season debut in December last year. While their performance wasn’t bad back then, this new activity is crucial for HYBE given the overall lackluster performance of its girl groups.
After fromis_9, formerly under Pledis Entertainment, decided not to renew their contract, HYBE now has four girl groups: LE SSERAFIM (under Source Music), NewJeans (under ADOR), ILLIT (under Belift Lab), and KATSEYE (under HYBE Universal).
However, the outlook is not positive for the other three groups besides KATSEYE. NewJeans has suspended activities due to a management dispute between former ADOR CEO Min Hee-jin and HYBE that began in April 2024.
NewJeans is not the only group affected. Min claimed that LE SSERAFIM debuted before NewJeans unfairly and that ILLIT imitated NewJeans. Industry insiders say that these allegations have significantly damaged the public image of LE SSERAFIM and ILLIT.
Indeed, both groups have seen a noticeable drop in performance.
In the K-pop industry, the "initial album sales"—the number of albums sold within the first week of release—are considered a key metric. Both LE SSERAFIM and ILLIT have fallen short in this regard.
LE SSERAFIM sold 990,000 copies of their third mini album “EASY” in February 2024. However, their fourth mini album “CRAZY” in August 2024 and the fifth mini album “HOT” in March 2025 sold only 680,000 and 630,000 copies, respectively. All three albums were executive produced by Bang Si-hyuk, chairman of HYBE’s board of directors.
In contrast, SM Entertainment’s girl group aespa sold 1.15 million copies of “Armageddon” in May 2024 and 910,000 copies of “Whiplash” in October 2024. Compared to that, LE SSERAFIM's performance seems underwhelming.
LE SSERAFIM’s slump is reflected in the business performance of their label, Source Music. According to HYBE, Source Music recorded a net profit of KRW 6.59 billion (US$ 4.6 million) in 2024, a 50% drop compared to 2023. Quarterly figures show a consistent decline—from KRW 4.4 billion (US$ 3.1 million) in Q1, to KRW 1.7 billion (US$ 1.2 million) in Q2, and KRW 1.5 billion (US$ 1.0 million) in Q3—culminating in a net loss of KRW 1 billion (US$ 700,000) in Q4.
Given that LE SSERAFIM is the only artist under Source Music, its business performance essentially reflects that of the group.
ILLIT is also facing challenges. Their debut album “SUPER REAL ME” released in March 2024 and “I’LL LIKE YOU” released in October 2024 both recorded initial sales of 380,000 copies. The debut track “Magnetic” even reached No. 1 on Melon’s daily chart in March 2024.
However, after the ADOR controversy, the single “Cherish (My Love)” released in October only reached 52nd on the Melon daily chart—a key indicator of mainstream popularity.
The performance of HYBE’s girl group KATSEYE is drawing attention because of HYBE’s over-reliance on boy groups. From a revenue diversification and risk management perspective, it’s not healthy for a company to depend so heavily on boy group earnings.
In 2024, the combined revenue of the four HYBE subsidiaries managing its girl groups totaled KRW 570.5 billion (US$ 396.8 million), about 25% of HYBE’s total revenue. But this includes sales from boy group ENHYPEN under Belift Lab, suggesting that the actual share from girl groups is likely even lower.
HYBE’s competitors show a different picture.
At JYP Entertainment, girl groups accounted for 6.87 million out of the 13.675 million albums sold in 2024—roughly 50%. While album sales don’t directly equate to business performance due to other revenue streams like concerts and merchandise, this does illustrate a well-balanced portfolio.
At YG Entertainment, girl groups like BLACKPINK and BABYMONSTER dominate in album sales, while the boy group TREASURE leads in concert attendance. Of the 2.03 million albums YG sold in 2024, BABYMONSTER and BLACKPINK accounted for 1.59 million and 230,000 copies respectively—90% of the total. For concerts, TREASURE drew 590,000 attendees, accounting for 82% of YG’s total 720,000.
Chairman Bang also appears eager for the success of HYBE’s girl groups.
On April 22, he posted a photo on social media with members of LE SSERAFIM, ILLIT, and KATSEYE, tagging it with the hashtag #ONETEAM—signaling his strong commitment to the success of HYBE’s girl group lineup.
#HYBE #BangSiHyuk #Kpop #KATSEYE #LE_SSERAFIM #ILLIT #NewJeans #GirlGroups #KpopIndustry #EntertainmentBusiness
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- KDB Chairman Kang Seog-hoon’s Final Missions: Ending Ties with Hanwha Ocean and Accelerating HMM Stake Sale
- Kang Seog-hoon, the Chairman of KDB Korea Development Bank, is accelerating the sale of shares in Hanwha Ocean as his term nears its end.
After successfully finding a new owner for Daewoo Shipbuilding & Marine Engineering (now Hanwha Ocean) early in his term, Kang appears poised to wrap up his tenure by selling the bank’s remaining shares in Hanwha Ocean.
There is also speculation that Kang might prepare to sell KDB’s stake in HMM to strengthen the bank’s financial soundness.
According to KDB on April 29, the bank is conducting demand forecasting to sell part of its 19.5% stake in Hanwha Ocean through a block deal (off-hours bulk trading).
At the end of 2022, KDB held 55.68% of Daewoo Shipbuilding & Marine Engineering, but in 2023 it transferred majority ownership to Hanwha Group, reducing its stake to the current level.
A KDB official said, "In May 2023, the management rights of Daewoo Shipbuilding & Marine Engineering were transferred to Hanwha Group, and restructuring goals such as performance improvement were achieved," adding, "At the time, it was decided to sell the remaining shares at an appropriate time, and with the industry recovering and restructuring goals achieved, we are now proceeding with the sale."
Industry insiders expect KDB to gradually reduce its Hanwha Ocean stake based on the results of the demand forecasting.
If KDB sells off its remaining Hanwha Ocean shares over the medium to long term, it will bring an end to the bank’s long-standing relationship with Daewoo Shipbuilding & Marine Engineering, which dates back to 2000.
Although the relationship between KDB and Daewoo Shipbuilding & Marine Engineering stretches back to the 1970s when Daewoo Group acquired the Okpo Shipyard, KDB has held its current form of shareholding since 2000.
After the collapse of Daewoo Group during the Asian financial crisis, KDB became the largest shareholder of Daewoo Shipbuilding through a debt-for-equity swap in 2000.
The company’s name was later changed to Daewoo Shipbuilding & Marine Engineering in 2002. Despite multiple privatization attempts, KDB struggled to find a buyer.
The most notable failed attempts were in 2008 and 2019.
In 2008, KDB selected Hanwha Group as the preferred bidder, but the global financial crisis thwarted the deal in 2009. In 2019, it reached a formal agreement with Hyundai Heavy Industries, but the European Union rejected the acquisition in 2022, causing the deal to collapse again.
Kang Seog-hoon is credited as the key figure who successfully sold Daewoo Shipbuilding & Marine Engineering.
After being appointed Chairman of KDB in June 2022, Kang accelerated the sale process and selected Hanwha Group as the preferred bidder in September of that year.
In effect, Kang led the privatization immediately after taking office. At a press conference marking his first anniversary as Chairman in June 2023, he cited the privatization of Daewoo Shipbuilding & Marine Engineering as his biggest achievement.
Throughout his term, Kang supported the relocation of KDB’s headquarters to Busan, a major pledge of former President Yoon Suk-yeol, often clashing with labor unions and the opposition Democratic Party.
Despite political controversies, Kang, an economist and former professor, successfully handled major tasks including the sale of Daewoo Shipbuilding, the merger of Korean Air and Asiana Airlines, the sale of SsangYong Motor, and the restructuring of Taeyoung Construction.
Kang’s three-year term, which started on June 7, 2022, will end on June 6, 2025. Given that a new government will take office after the presidential election on June 3, his chances of reappointment are considered low.
Thus, Kang’s move to sell off the remaining Hanwha Ocean shares is seen as his final effort to conclude the relationship he initiated by finding a new owner for Daewoo Shipbuilding early in his tenure.
Kang’s decision to sell Hanwha Ocean shares is also aimed at improving KDB’s financial health.
Selling the shares would increase KDB’s Basel III capital adequacy ratio, allowing the bank to expand investments in new areas such as semiconductors and artificial intelligence (AI).
As of the end of last year, KDB’s Basel III capital adequacy ratio was 13.9%, the lowest among major domestic banks. This was a drop of over 3 percentage points from 14.36% at the end of the third quarter, barely above the Financial Supervisory Service’s recommended level of 13%.
To prevent a further drop, KDB carried out about KRW 2.4 trillion (US$ 1.73 billion) in capital increases last year, including a stock contribution from Korea Land and Housing Corporation (LH), but only achieved a temporary improvement.
In 2025, KDB continued to boost its capital with over KRW 200 billion (US$ 144 million) in increases in February and March and is planning additional capital raises.
As a policy bank responsible for supporting domestic industries, KDB needs a strong capital base to ensure it can pursue new investments without restrictions.
Since taking office, Kang has repeatedly emphasized the importance of the "golden time" for investments in strategic industries. Last year, he introduced the "Korea Rebound Program," pledging KRW 100 trillion (US$ 72 billion) over three years for policy financing in sectors such as semiconductors and AI.
Improving KDB’s capital adequacy ratio is essential for boosting new investments, and selling stock assets like Hanwha Ocean shares can significantly help.
When calculating the Basel III ratio, risk-weighted assets (RWA) are included in the denominator. Since stock assets carry relatively high risk weights, selling them reduces RWAs.
For these reasons, there is speculation that Kang may also prepare to sell KDB’s stake in HMM before his term ends.
Speaking with reporters after the "NextRound Silicon Valley" event in the U.S. on April 23, Kang said, "We are seriously considering the sale of HMM shares."
According to Kang, under Basel III regulations, if a bank holds more than 15% of its equity capital in a single company’s shares, a risk weight of 1250% is applied to the excess portion.
If HMM’s stock price exceeds KRW 18,600 (US$ 13.4), a 1250% risk weight applies. HMM’s stock closed at KRW 18,660 (US$ 13.5) the previous day.
Kang added, "If HMM’s stock price exceeds KRW 25,000 (US$ 18.1), maintaining a 13% capital adequacy ratio would be at risk," and stressed, "No matter how close I am to the end of my term, I cannot put KDB in a dangerous situation."
#KangSeoghoon #KDB #HanwhaOcean #HMM #BISCapitalRatio #Privatization #DaewooShipbuilding #IndustrialBanking #KoreaReboundProgram #FinancialStability
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- LG H&H Must Pivot to North America; Lee Jung-ae Faces Task of Finding the Next "Whoo"
- Lee Jung-ae, the CEO and President of LG Household & Health Care (H&H), has continued to focus on North America as a key market since taking office, maintaining a steady pace of investment.
Building on the foundation laid by former CEO Cha Suk-yong through multiple acquisitions of North American beauty companies, she has recently participated in a capital increase for the North American subsidiary, accelerating efforts to penetrate the local market.
However, unlike the remarkable success of "The History of Whoo" in China, LG H&H has yet to achieve notable results in North America. Industry insiders express growing concerns that continued delays in discovering new growth brands tailored to North American consumer preferences could render current investments less effective.
As of April 29, an overview of LG H&H’s performance indicates that the recovery of the cosmetics division, which had struggled post-COVID-19, remains sluggish.
In the first quarter of this year, LG H&H’s cosmetics division recorded consolidated sales of KRW 1.6979 trillion (US$ 1.22 billion) and an operating profit of KRW 142.4 billion (US$ 102.7 million), representing a 1.8% drop in sales and a 5.7% decline in operating profit compared to the first quarter of last year.
Although sales in North America rose by 3.1% year-over-year, they accounted for only 7% of total sales.
Heo Je-na, an analyst at DB Financial Investment, noted, “The growth in overseas sales for LG H&H’s cosmetics division remains minimal,” adding, “When measured in local currencies, sales in China and the U.S. declined by about 10% and 6%, respectively.”
Following the sharp post-COVID-19 decline in China, once its core market, LG H&H has been actively seeking new growth engines, identifying North America as the next major market after China and continuing strategic investments.
To target North America, LG H&H actively pursued mergers and acquisitions to expand its local business presence.
Notably, it acquired North American cosmetics company, The Avon Company, for approximately KRW 145 billion (US$ 104.5 million) in 2019, acquired rights to the Physiogel brand in Asia and North America in 2020, purchased shares of haircare brand Boinca in 2021, and acquired shares of U.S. cosmetics brand The Crème Shop in 2022.
A total of about KRW 605.1 billion (US$ 436.3 million) was invested across these four North American acquisitions.
More recently, the company participated in a KRW 186 billion (US$ 134.1 million) capital increase for its North American subsidiary.
Of this, KRW 100 billion (US$ 72.2 million) will be used to support the subsidiary’s operations and improve its financial structure, while KRW 86 billion (US$ 62.0 million) will support the operations of its affiliate, The Avon Company.
To strengthen its North American business, Lee Jung-ae has been actively expanding marketing for various beauty and personal care (BPC) brands such as The Face Shop, CNP, and Belif, primarily through Amazon. The recent capital increase and support for The Avon Company are seen as part of this strategy.
However, despite aggressive investments, critics point out that tangible results in North America remain elusive.
The absence of a local "key product lineup" similar to "The History of Whoo" is cited as a major reason for underperformance. Comparisons with APR, which has successfully entered the North American market, further highlight the gap.
APR quickly gained a foothold in North America by getting multiple products from its brands Medicube and Aprilskin into Amazon’s top rankings. Medicube’s Pore Toner Pad even ranked number one in the skincare category on Amazon.
APR’s success is largely attributed to "cost-effectiveness." Their products are priced between $10 and $20 while maintaining high quality, about half the price of similar products from French or American brands.
This clearly illustrates the difficulty premium brands like "The History of Whoo" face in the highly competitive North American market.
Targeting the high demand among local consumers for basic skincare products with features such as skin texture improvement and low-irritant ingredients also proved effective.
Indeed, the core strategy behind K-beauty’s success has emphasized "basic care over color cosmetics" and "cost-effective positioning due to low manufacturing costs."
However, quickly reducing LG H&H’s heavy dependence on "The History of Whoo" premium brand is not easy.
Currently, more than half of LG H&H’s cosmetics revenue comes from "The History of Whoo." In the first quarter of this year, "The History of Whoo" accounted for 51% of major brand sales, followed by The Face Shop at 8% and CNP at 4%.
Under former CEO Cha Suk-yong, LG H&H concentrated a significant portion of its corporate resources on the Chinese market. Before COVID-19, trillion-won-level revenues were generated solely in China, and most sales networks and manpower were aligned with the Chinese market.
Even the company’s legal team had several patent attorneys specializing in China, reflecting its heavy dependence on China and "The History of Whoo."
Industry experts agree that it will take significant time to pivot strategies and infrastructures once heavily geared toward China to succeed in the U.S. market.
Given that LG H&H had a strong success model with "The History of Whoo" in China, its production systems and organizational structures are likely still centered around that model.
The contrast with APR’s diversified brand portfolio strategy aimed at North America is even more pronounced.
While APR pursued market diversification from the beginning, LG H&H, with its longstanding focus on premium brands, now faces the challenge of establishing a fresh foundation in North America.
Experts argue that successfully entering the North American market will require investments and long-term brand-building efforts many times greater than before.
An LG H&H official stated, “We plan to strengthen brand awareness and growth foundations in the Americas by expanding marketing investments in beauty and personal care brands such as The Face Shop, CNP, Belif, and Dr. Groot,” adding, “We will also enhance marketing activities centered on color and derma brands to expand our product influence in the Japanese market.”
#LeeJungAe #LGHouseholdAndHealthCare #NorthAmericaExpansion #TheHistoryofWhoo #CosmeticsBusiness #KBeauty #APR #Medicube #GlobalStrategy #BeautyIndustry
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- How Long Will Kim Young-shub’s KT “AI Communication” Transformation Last? The Real Issue Is Management Strategy
- Kim Young-shub, CEO and President of KT, has been tightening the reins on expanding the AI business after surpassing one and a half years since his inauguration.
He has declared a major transformation into an “AI Communication (AICT) Company” and is pushing for a large-scale organizational restructuring and workforce realignment, while also pursuing a strategic partnership with global big tech company Microsoft (MS).
However, KT's management environment still exposes structural limitations vulnerable to political influence, raising questions about whether the consistency of its management strategy can be maintained both internally and externally.
◆ Major Transformation into an AI Communication (AICT) Company and Kim Young-shub’s Strategy
Starting in 2024, Kim declared a full transition to an “AI Communication (AICT) Company” that merges AI with telecommunications technology, accelerating systematic reorganization, workforce innovation, and the restructuring of fragmented business units.
One notable AI innovation initiative is the five-year strategic partnership with Microsoft (MS).
The main goal is to focus capabilities on developing Korean-style AI solutions.
Kim is reportedly planning to create customized AI solutions tailored to the domestic industry by deeply training AI models not just in language processing but also in Korea’s societal and historical characteristics.
To achieve this, KT established the "AX Delivery Specialty Center," a dedicated organization for AI business promotion, creating a collaborative platform for about 300 Microsoft talents and KT’s AI experts.
Initially, the plan was to establish a joint venture, but for efficiency, they decided to operate it as a company-in-company (CIC).
Kim said, “During early discussions with Microsoft about collaboration, I proposed the idea, thinking it would be great if the best talents from both companies could work together.”
Kim is preparing to apply Microsoft’s AI GPT-4o model along with KT’s locally developed LLM “Mideum” to various industries such as public sectors, finance, manufacturing, and distribution.
Through the AI partnership, KT has reportedly secured over 10,000 graphic processing units (GPUs) based on NVIDIA’s H100.
Based on this series of organizational and infrastructure enhancements, Kim has set a strong target to raise KT’s AI business revenue to 12% of its total revenue by 2028.
In parallel, KT is also sorting out non-core businesses and conducting large-scale workforce restructuring to secure future capital, while speeding up the sale of real estate assets, such as hotels and land, worth several trillion KRW (several billion USD).
However, Kim’s strong push for AI business is expected to face uncertainty due to the early presidential election phase triggered by the impeachment of former President Yoon Suk-yeol.
◆ Challenges of Management Consistency Amid AI Strategy and External Influence
KT has historically suffered from repeated political and external interventions affecting its management autonomy and stability, from its public corporation days through privatization.
Even after privatization in 2002, KT has been embroiled in controversies involving parachute appointments, political lobbying, and slush funds.
Successive CEOs, including Lee Seok-chae, Hwang Chang-gyu, and Koo Hyun-mo, have faced political pressures and leadership challenges whenever administrations changed.
This “external influence” has not only impacted personnel appointments but also negatively affected KT’s long-term strategies and market competitiveness.
A notable example was Koo Hyun-mo’s failure to secure a second term, and the downfall of Yoon Kyung-lim, former Head of Group Transformation, under political pressure, despite Koo’s leadership in driving the digital transformation known as “Digico.”
Koo had set a goal to expand Digico's share, focused on B2B, big data, and cloud businesses, to 50% of KT's revenue by 2025, but that plan faded with his failure to be reappointed.
This structure, where management consistency is shaken from its roots by political winds, could similarly impact Kim Young-shub’s “AICT Vision.”
With changes expected in KT’s top management ahead of the early presidential election in June 2025, Kim’s prospects for a second term also remain uncertain.
Whether KT under Kim Young-shub’s leadership can embark on a path of sustainable growth or repeat another dark chapter remains to be seen.
#KimYoungshub #KT #AICT #MicrosoftPartnership #KoreanAISolution #Mideum #GPUExpansion #OrganizationalRestructuring #PoliticalInfluence #SustainableGrowth
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- Daewoo E&C Overcomes Urban Renewal Crisis, Kim Bo-hyun Focuses on 'Brand Boost' for Second Half Bids
- Kim Bo-hyun, the President and CEO of Daewoo Engineering & Construction (E&C), has managed to secure the redevelopment project for Hannam District 2 and achieved his first project win of the year, allowing him some breathing room in the urban renewal market.
However, to succeed in the fierce competition for core project sites in Seoul that will intensify in the second half of this year, it will become even more important for Kim to demonstrate stable capabilities in ongoing urban renewal projects and enhance the brand value.
According to Daewoo E&C on April 28, the company was selected as the contractor at the regular general meeting for the Gunpo District 1 redevelopment project held the previous day.
The Gunpo District 1 redevelopment project involves the construction of 932 apartment units in 10 buildings, with four basement levels and up to 29 above-ground floors, located at 731 Dang-dong, Gunpo, Gyeonggi Province. The project is valued at approximately KRW 298.1 billion (US$ 214.8 million).
This is Daewoo E&C’s first urban renewal project win of 2024. Until the first quarter of this year, Daewoo E&C was among the top 10 construction companies that had yet to achieve an urban renewal order, along with SK ecoplant and Hyundai Engineering.
In addition, Kim was able to further ease concerns by retaining Daewoo E&C’s contractor status for the Hannam District 2 redevelopment project.
On April 27, the Hannam District 2 redevelopment association held an extraordinary general meeting and conducted a second vote to decide whether to maintain Daewoo E&C’s contractor status. As a result, the decision was made to retain the construction contract.
With this decision, Daewoo E&C has managed to keep its construction rights for a KRW 790 billion (US$ 569.1 million) urban renewal project.
However, it may be painful for Kim that the proportion of association members opposed to Daewoo E&C’s contractor status increased compared to the first confidence vote.
In the latest vote, 852 members participated, with 439 voting in favor of maintaining the contract with Daewoo E&C, 402 voting against, and 11 abstaining.
In the first confidence vote held last year, 742 members participated, with 414 voting in favor, 317 against, and 11 abstentions.
Comparing the two votes, the number of opposition votes increased from 317 to 402, and the gap between approval and opposition narrowed from 97 votes to 37 votes. This indicates that the number of members not favorable to Daewoo E&C has grown.
The immediate causes behind the two confidence votes are said to be the collapse of Daewoo E&C’s "118 Project" proposal and conflicts over the handling of an internal road cutting through the complex.
Daewoo E&C had proposed building 21-story apartments with a height of 118 meters, assuming a relaxation of Nam Mountain’s scenic height restrictions, but this plan was thwarted by Seoul City, leading to the first confidence vote.
Subsequently, Daewoo E&C proposed eliminating the internal road to integrate the complex, but this plan was also rejected by Seoul City, fueling discontent and distrust among some association members.
In addition to these surface-level issues, dissatisfaction with Daewoo E&C’s brand value also reportedly influenced the need for two confidence votes.
The association president who had pushed for changing contractors claimed, "If we proceed with changing the contractor, a top-tier construction company will participate," and it appears that members sympathetic to this claim supported the move to replace the contractor.
Considering that changing the contractor would realistically impose a financial burden of several trillion won on the association members, which likely heavily influenced the vote outcome, Kim must now be even more focused on enhancing Daewoo E&C’s brand value.
Since this is Kim’s first year in office, he is expected to place strong emphasis on achieving results in Seoul’s major urban renewal projects from the second half of the year.
Daewoo E&C is pursuing orders for redevelopment and reconstruction projects in key areas such as Cheongpa District 1 in Yongsan, Wonhyo Villa Reconstruction in Seocho, and Gaepo Woosung Complex 7 Reconstruction in Gangnam.
Moreover, competition among major domestic builders is expected to intensify in high-profile areas like Apgujeong, Seongsu, and Yeouido, meaning Daewoo E&C cannot afford to fall behind.
A Daewoo E&C official stated, "Daewoo E&C is implementing a selective order strategy centered on premium project sites in Seoul and the metropolitan area this year, and is closely monitoring the progress of urban renewal projects in key areas such as Apgujeong and Seongsu."
However, for Kim, the most critical task may be to show successful execution at the current project sites to enhance competitiveness against other major construction companies.
In particular, since the Hannam area is regarded as one of the most prestigious regions in Seoul, the progress of the Hannam District 2 project could significantly influence future contractor selections by other associations.
Daewoo E&C stated, "We will do our best to ensure that even those who opposed maintaining Daewoo E&C’s contractor status in Hannam District 2 will be satisfied," and added, "We will apply specialized designs to create a landmark residential complex."
#KimBohyun #DaewooEandC #UrbanRenewal #HannamDistrict2 #GunpoDistrict1 #Redevelopment #ConstructionIndustry #SeoulProjects #SelectiveBidding #BrandEnhancement
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- CJ CheilJedang Withdraws 'Selectay Sale', Kang Sin-ho Seeks New Strategy for 'Selection and Concentration'
- Kang Sin-ho, Vice Chairman and CEO of CJ CheilJedang, has found himself in a difficult position as selling subsidiaries is not proceeding as smoothly as expected.
After returning as the head of CJ CheilJedang last year with the title of Vice Chairman, Kang accelerated the business structure reorganization, but the actual achievements have been evaluated as falling short of expectations.
According to sources inside and outside CJ CheilJedang on April 28, it is understood that the process of selling multiple subsidiaries is not going smoothly.
CJ CheilJedang recently announced through a public disclosure that it was withdrawing its plan to sell CJ Selecta, the world’s leading producer of concentrated soy protein. The company explained that the main reason for the withdrawal was the counterparty’s failure to meet the preconditions for the transaction.
CJ CheilJedang decided to scrap the sale of CJ Selecta 1 year and 7 months after officially announcing the sale plan in October 2023.
CJ Selecta is a particularly meaningful company for CJ CheilJedang. It was the first major acquisition announced just one month after CJ Group Chairman Lee Jay-hyun returned to management in May 2017.
At that time, CJ CheilJedang spent KRW 360 billion (US$ 259.5 million) to acquire a 90% stake in CJ Selecta through its affiliates. Currently, CJ CheilJedang holds 100% of CJ Selecta’s shares directly and indirectly.
It is widely viewed that the decision to sell CJ Selecta effectively came from Chairman Lee Jay-hyun himself. It is speculated that he judged the company was not performing as expected and moved quickly to sell it and turn attention to other major deals.
CJ CheilJedang explained the sale plan by stating, "The purpose was to advance the bio business portfolio and enhance management efficiency."
The poor performance of the company was also cited as a reason for the sale. CJ Selecta recorded sales of KRW 714 billion (US$ 514.9 million) and a net loss of KRW 12.2 billion (US$ 8.8 million) in 2024. Although the net loss was halved compared to 2023, sales also declined, making CJ Selecta a burden for CJ CheilJedang.
CJ CheilJedang was reportedly aiming to secure about KRW 700 billion to 800 billion (US$ 504.4 million to US$ 576.5 million) through the sale of its 100% stake.
Had the sale succeeded, it was expected that CJ CheilJedang would improve its business structure by focusing on specialty amino acids and solution products, but the failure of the sale leaves the company unable to plan for the future. Until market conditions improve, CJ CheilJedang will be burdened with carrying the loss-making business.
CJ CheilJedang’s difficulties in selling subsidiaries are not limited to CJ Selecta. The company is also seeking opportunities to sell CJ Feed&Care, its feed manufacturing and livestock subsidiary, but no significant progress has been made so far.
CJ Feed&Care was established in 2019 through a physical division by CJ CheilJedang and achieved record profits in 2020. However, its profitability has continued to deteriorate, turning into a net loss of KRW 5.3 billion (US$ 3.8 million) in 2023, and the loss expanded to KRW 57.3 billion (US$ 41.3 million) last year.
Similarly, no significant progress has been made in selling the bio business division. Although news broke late last year that the bio business division might be sold, and there were expectations of rapid developments, CJ CheilJedang explained that, like CJ Feed&Care, nothing had been decided yet.
In March, CJ CheilJedang acknowledged that it had received a sale proposal from private equity firm MBK Partners, but it is still considered a long way from finalizing any deal.
The sluggishness of subsidiary and business unit sales that have been publicly announced must be a considerable concern for Vice Chairman Kang.
Kang enjoys deep trust from the CJ Group owner family. After becoming CEO of CJ Freshway in 2014, he went on to serve as CEO of several major CJ Group affiliates.
He was CEO of CJ Logistics before being promoted to Vice Chairman and returning to CJ CheilJedang in February 2024. Currently, excluding the owner family member Lee Mi-kyung, Vice Chairman of CJ Group, Kang is the only professional executive at the Vice Chairman level in the group, demonstrating his strong position.
After regaining leadership at CJ CheilJedang, Kang began restructuring the company’s business structure. In May 2024, he merged the Food & Nutrition (FNT) division back into the Bio division. As a result, CJ CheilJedang reorganized its business segments from four (Food, Bio, FNT, Feed&Care) to three (Food, Bio, Feed&Care).
This was generally seen as a move to focus on revitalizing the struggling Bio business division, highlighting Kang’s emphasis on portfolio restructuring.
Since then, news about the sale of subsidiaries at CJ CheilJedang has continued to surface, fueling speculation that Kang was planning to sell off companies that were unlikely to have an immediate positive impact on CJ CheilJedang and invest in new growth drivers.
However, contrary to expectations, the difficulty in selling subsidiaries has put Kang’s plans at risk. It is now believed that Kang may also have to revise his plan to raise funds for future growth investments.
A CJ CheilJedang spokesperson stated, "Since the company is not facing an urgent liquidity crisis, there is no need to rush the sale of subsidiaries," and added, "Due to ongoing uncertainties surrounding the sales process and the counterparty’s failure to meet the preconditions, we decided to withdraw from the sale of CJ Selecta."
#KangSinhho #CJCheilJedang #CJGroup #CJSelecta #SubsidiarySale #MergersAndAcquisitions #BusinessRestructuring #PortfolioReorganization #BioBusiness #FutureGrowthPlans
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- Chang Duck-hyun Faces Risk as TSMC’s SoW-X Technology Shakes Samsung Electro-Mechanics
- Chang Duck-hyun, the President and CEO of Samsung Electro-Mechanics, is closely watching whether the company’s massive investment in the Flip Chip-Ball Grid Array (FC-BGA) substrate business will be impacted by TSMC’s newly developed substrate-less wafer packaging technology.
TSMC’s 'SoW-X (System on Wafer-X)' packaging technology, which will be introduced in 2027, enables the combination of AI chips and high bandwidth memory (HBM) without the need for substrates. This could eliminate the necessity of FC-BGA substrates, which have been essential in conventional semiconductor packaging processes.
Similarly, Samsung Electro-Mechanics’ "glass substrate" business, which has been considered a future growth engine and heavily invested in, may not see the explosive demand initially anticipated if TSMC successfully commercializes its substrate-less packaging technology.
According to a comprehensive report from the semiconductor industry on April 28, the outlook for Samsung Electro-Mechanics’ substrate business is becoming darker due to TSMC’s new substrate-less semiconductor packaging technology.
On April 24, at the 'North America Technology Symposium' held in California, TSMC unveiled its new packaging technology 'SoW-X,' which is said to offer 40 times the performance of its previous CoWoS (Chip On Wafer On Substrate) packaging technology.
AI semiconductors utilizing this technology are scheduled to enter mass production in 2027. While CoWoS and SoW-X will likely coexist for some time after 2027, the significant performance enhancements offered by SoW-X are expected to lead the production of high-value AI chips to increasingly adopt SoW-X technology.
The core feature of the SoW-X packaging technology is that it does not require a substrate. It enables the combination of AI chips and HBM directly on a wafer, eliminating the need for FC-BGA substrates used in the CoWoS process.
As a result, Chang is expected to face increased concerns.
Chang has made massive investments into the FC-BGA substrate business for AI applications, but demand for advanced AI chip substrates is expected to decline starting in 2027 with the expansion of SoW-X packaging.
Since 2021, Samsung Electro-Mechanics has invested KRW 1.9 trillion (US$ 1.37 billion) into the FC-BGA substrate business and planned to increase the sales share of FC-BGA substrates to more than 50% of its total revenue by 2026. In December last year, the company reportedly added a new FC-BGA production line at its factory in Vietnam.
Samsung Electro-Mechanics’ investment in glass substrates, which has been drawing attention as the next "game changer" in the semiconductor substrate industry, may also face a lower-than-expected surge in demand if SoW-X technology is commercialized. Coincidentally, Samsung Electro-Mechanics is aiming for mass production of its glass substrates around 2027, aligning with TSMC’s planned commercialization of SoW-X.
Yang Seung-soo, an analyst at Meritz Securities, stated, "Glass substrates have been highlighted as a solution to overcome the size limitations of FC-BGA, but the introduction of SoW-X suggests a new substrate-less direction, likely limiting growth potential."
TSMC, the world’s largest foundry company, almost monopolizes AI chip production, leaving no current alternative suppliers for AI chip substrates. In the fourth quarter of last year, TSMC’s global foundry market share reached 67.1%.
According to Reuters, SoW-X technology can connect 16 computing chips, offering performance vastly superior to currently available AI chips. Nvidia’s "Blackwell" AI chips integrate two computing chips, and the "Rubin" series to be released next year will connect four chips.
Neil Shah, Vice President of Counterpoint Research, said, "SoW-X integrates computing system-on-chip (SoC), HBM, and optical interconnects into a single package, providing wafer-scale computing performance and enhancing speed. It reduces latency compared to traditional multi-chip configurations, improves power efficiency, and strengthens scalability."
Even after 2027, when TSMC begins mass production with SoW-X, demand for FC-BGA substrates is expected to continue in general servers, PCs, and automotive components. However, the future chip packaging market is forecasted to bifurcate into high-end chips using substrate-less packaging and lower-end chips continuing to use conventional substrates.
As future semiconductor packaging technology evolves toward substrate-less solutions, it is widely expected that Samsung Electro-Mechanics will need to revise its future substrate business strategy.
An industry official said, "It is true that TSMC’s unveiling of SoW-X packaging is expected to lead to a shift in direction for substrate companies," adding, "However, due to ongoing IT demand and the growing demand for automotive semiconductors, FC-BGA demand is expected to continue at a certain level."
#ChangDuckhyun #SamsungElectroMechanics #TSMC #SoWX #FCBGA #GlassSubstrate #SemiconductorPackaging #FutureTechnology #AIMarket #SubstrateBusiness
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- Kyobo Life’s Shin Chang-jae Moves Closer to Holding Company Transition with SBI Savings Bank Acquisition Plan
- Shin Chang-jae, Chairman and CEO of Kyobo Life Insurance, is seeing an increased likelihood of achieving his long-awaited goal of transitioning the company into a financial holding group.
According to the financial industry on April 25, Kyobo Life Insurance is pursuing the acquisition of a 30% stake in SBI Savings Bank currently held by Japan’s SBI Holdings.
An extraordinary board meeting of Kyobo Life Insurance is expected as early as next week to discuss the proposed acquisition.
If Kyobo Life acquires the 30% stake in SBI Savings Bank, it will become the second-largest shareholder.
It is understood that the company plans to gradually increase its stake to 50% over the next one to two years to secure management control of the savings bank.
According to current regulations, acquiring more than 10% of a savings bank requires approval from financial authorities through a major shareholder eligibility review. If the acquisition is finalized, Kyobo Life is expected to proceed with the necessary regulatory procedures.
SBI Savings Bank is known as one of the more financially sound institutions among savings banks. Due to its low exposure to real estate project financing (PF) loans, it managed to stay profitable despite growing concerns over PF-related insolvencies in the savings bank industry.
This push to acquire SBI Savings Bank is being interpreted as a move by Chairman Shin to accelerate Kyobo Life’s transition into a holding company—an ambition he has pursued for years.
Kyobo Life currently has affiliates such as Kyobo Securities, Kyobo AXA Investment Managers, and Kyobo Real Estate Trust. However, it lacks subsidiaries in key financial sectors such as savings banks, credit cards, and non-life insurance.
To transition into a holding company, it has been deemed necessary for Kyobo Life to strengthen its portfolio across the broader financial spectrum.
In addition, recent developments have resolved some of the uncertainties that had made the transition more difficult, such as the long-standing “put option dispute.”
Although Chairman Shin officially announced plans to convert Kyobo Life into a holding company in February 2023, little progress had been made due to the prolonged put option dispute with financial investors (FIs).
However, in March of this year, the dispute appeared to be easing after major FIs—Affinity Equity Partners and GIC (Government of Singapore Investment Corporation)—sold their 9.05% and 4.50% stakes in Kyobo Life, respectively.
The acquisition of an affiliate of Japan’s SBI Holdings, a company with a long-standing friendly relationship with Kyobo Life, is seen as more than just portfolio expansion.
Chairman Shin and SBI Holdings’ CEO Yoshitaka Kitao have had personal ties dating back to 2007, when SBI Holdings acquired a roughly 5% stake in Kyobo Life, which it sold off in 2009.
The two companies have continued collaborating, including a joint consortium for establishing an internet-only bank in 2019, and signing a memorandum of understanding in July 2024 to strengthen cooperation in digital finance, including digital healthcare and token securities.
In March of this year, SBI Holdings purchased the 9.05% stake in Kyobo Life previously held by Affinity Equity Partners.
On April 18, SBI Holdings announced that it would acquire an additional stake in Kyobo Life.
If approved by financial regulators in both Korea and Japan, SBI Holdings will own approximately 20% of Kyobo Life, becoming its second-largest shareholder.
It is also known that Chairman Shin and Chairman Kitao of SBI Holdings have maintained a close personal relationship.
A Kyobo Life official stated, “It is true that we have been identifying potential acquisition targets in non-life insurance, capital, and savings banks over the past one to two years as part of our goal to become a financial holding company,” but added, “Nothing has been definitively confirmed yet regarding the acquisition of SBI Savings Bank.”
#ShinChangjae #KyoboLifeInsurance #SBISavingsBank #financialholdingcompany #putoptiondispute #SBIHoldings #M&Astrategy #digitalfinance #Koreaninsurance #portfolioexpansion #KitaoYoshitaka #FIsale #financialregulatorsKoreaJapan
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- Lee Seung-gun’s Bold Bet: Offering KRW 1 Million Interview Bonus, Aims to Soar with Toss Advertising and Shopping
- Lee Seung-gun, CEO of Viva Republica, is taking aggressive steps to expand teams in high-margin revenue businesses such as advertising and commerce.
This is seen as a strong signal of his commitment to solidifying the company’s profitability, following the company’s first-ever annual net profit last year. With Viva Republica currently preparing for an initial public offering (IPO) on the U.S. stock market, boosting profitability to enhance corporate value has become a critical task.
According to Toss on April 25, the company is holding a focused hiring event through May 11 for server developers and machine learning (ML) engineers in the advertising and commerce (shopping) divisions.
The company is offering an unprecedented incentive: KRW 1 million (US$ 720) to every candidate who completes the first round of job interviews for those roles.
Toss had previously held a large-scale recruitment drive in the second half of 2022 across all its affiliates, hiring up to 300 people and awarding KRW 1 million (US$ 720) in “growth support funds” to 400 randomly selected applicants who passed the resume screening.
This time, however, the hiring focus has narrowed specifically to IT developers in the advertising and commerce sectors—highlighting these as key business areas for the company in 2024.
On the previous day, Lee attended a meetup held at Toss’s office in Yeoksam-dong focused on advertising and commerce businesses.
He spoke about why Toss is entering the advertising and commerce industries, what services, products, and technologies it aims to develop, and presented a vision for Toss’s business direction and strategy over the next five years.
The meetup was attended by key leadership including Lee himself, Park Woong-do (Head of Toss Commerce), Kim Hyun-joon (Head of Commerce Tech), Kim Hyung-bin (Head of Toss Advertising), Lee Hang-ryeong (Head of Server Division), and Kim Hong-soo (Head of Data Business).
Advertising is one of the most representative revenue models for Toss as a platform business.
Platform businesses usually start with free services to attract users and traffic, which often entails early-stage deficits. Once the platform scales, advertising and commission-based revenue models are introduced.
Toss began with a simple, fee-free money transfer service and has grown into a platform with 28.4 million users. As a result, its advertising and commission-based services are steadily growing.
The consumer services division—which includes advertising, loan brokerage, simple payments, tax services, and securities—accounted for 36.4% of revenue in 2022, 42.5% in 2023, and rose to 58.2% last year. In contrast, revenue from merchant services, such as payment terminal sales, declined from 63.6% in 2022 to 57.5% in 2023, and to 41.8% last year.
The advertising business also offers high scalability. Compared to financial services, it faces relatively fewer regulatory hurdles, making overseas expansion more feasible.
In fact, Lee reportedly set a goal of making Toss Advertising not just the best in Korea, but one of the top media platforms globally.
Given Viva Republica’s current pursuit of a U.S. IPO and global expansion, the successful growth of its advertising business becomes even more critical.
Commerce (shopping) is another area Toss is strongly investing in as a future core revenue model.
It is a sector where Toss can leverage its existing user base and platform competitiveness to drive rapid growth. The business can also create strong synergy with Toss Pay and the advertising demand from sellers who want product exposure on the platform.
In December 2024, Toss revamped its app and placed “Toss Shopping” at the center bottom of the home screen—signaling its intention to elevate shopping into a core service.
Toss Shopping started in 2023 as a group-buying service within Toss Pay. In September of the same year, it evolved into an open-market platform allowing individual sellers to list and sell products. Currently, the platform has between 30,000 and 40,000 registered sellers.
On April 24, Lee posted on his personal LinkedIn account about hiring developers for advertising and commerce, stating, “Toss will carry out a large-scale recruitment of over 1,000 people this year,” adding, “This may be the last major expansion for Toss.”
He emphasized that this could be the last chance to get on board with “Team Toss,” which is poised for 10x growth.
Viva Republica posted an operating profit of KRW 90.7 billion (US$ 65.4 million) and net profit of KRW 21.3 billion (US$ 15.4 million) in 2024, marking its first-ever annual profit since its founding in 2013.
In a press release announcing the results, Lee said, “This milestone, achieved 10 years after launching the Toss application, demonstrates that Toss’s growth strategy has now matured into a stable business model,” adding, “We will continue to strengthen both profitability and growth by innovating user-centered services and advancing the platform.”
#LeeSeungGun #VivaRepublica #Toss #TossAdvertising #TossCommerce #IPO #revenuegrowth #platformbusiness #adtech #ecommerceKorea #developerhiring #Koreanstartup #profitabilitydriven #TossExpansion
