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- Will Hanwha Financial Speed Up Separation? Hurdles Await Hanwha Life’s Kim Dong-won on Path to Independence
- Kim Dong-won, President and Chief Global Officer (CGO) of Hanwha Life Insurance, is drawing attention over whether he will begin the process of formally separating Hanwha Financial from the Hanwha Group.
This speculation arises as discussions about Hanwha Group’s potential transition to a holding company structure have resurfaced. If Hanwha Group transitions to a holding company system, financial subsidiaries overseen by Kim will inevitably have to become independent, in accordance with the principle of separation between industrial and financial capital.
However, analysts say that a complete separation of financial affiliates may take time, as Kim still faces tasks such as securing a larger stake in Hanwha Life.
According to a summary of opinions from inside and outside the financial industry on April 1, there is speculation that Kim may accelerate the separation of Hanwha Financial, centering on Hanwha Life.
On March 31, Hanwha Group Chairman Kim Seung-yeon announced he would gift half (11.32%) of his 22.65% stake in Hanwha to his three sons.
Among the 11.32% gifted, Kim Dong-kwan, Vice Chairman of Hanwha, who leads the group’s manufacturing and defense sectors, received 4.86%. Kim Dong-won, President of Hanwha Life and responsible for the group’s financial businesses, and Kim Dong-sun, Executive Vice President of Hanwha Galleria, in charge of distribution and leisure sectors, each received 3.23%.
Hanwha serves as the de facto holding company within the Hanwha Group, and this equity transfer is widely interpreted as part of a succession plan.
Business circles see this move as a clear sign of the establishment of a “third-generation owner-led” management system, and it has reignited speculation that Hanwha Group may transition to a formal holding company structure.
Currently, Hanwha Group does not officially operate under a holding company structure.
However, since Chairman Kim’s three sons have been receiving management training in their respective sectors, the possibility of separating affiliates through a holding company conversion has long been considered.
Among the three, Kim Dong-won is expected to be the most affected by such a transition. If the group adopts a holding company structure, the principle of separation between industrial and financial capital would require the financial subsidiaries under Kim’s control to be fully separated from the group.
If Kim proceeds with the separation of Hanwha Financial, it is expected to be centered around Hanwha Life, the company where he currently works.
Hanwha Group’s financial affiliates are already structured under a vertically integrated system with Hanwha Life at the top.
According to the 2024 business report, Hanwha Life holds controlling stakes in several financial affiliates, including Hanwha Life Financial Services (88.9%), a corporate general agency (GA); Hanwha General Insurance (63.3%); Hanwha Asset Management (100%); and Hanwha Savings Bank (100%).
Additionally, Hanwha General Insurance controls Carrot General Insurance, and Hanwha Asset Management controls Hanwha Investment & Securities, forming a vertically integrated structure.
The governance structure of Hanwha Group’s financial affiliates was streamlined in October 2023, when Hanwha Life acquired the full stake in Hanwha Savings Bank from Hanwha Global Asset. This move allowed Hanwha Life to exert influence over all financial subsidiaries within the group.
Previously, Hanwha Savings Bank had been a subsidiary of Hanwha Global Asset, which is based on manufacturing and not classified as a financial company.
Even though the governance structure has been simplified, Kim still faces several challenges before he can push for a full separation of the group’s financial affiliates.
First and foremost, Kim needs to increase his ownership stake in Hanwha Life to strengthen his control.
As of the end of 2024, Kim holds 300,000 shares of Hanwha Life, representing a 0.03% stake. Even if one considers his indirect influence through ownership in Hanwha, the largest shareholder of Hanwha Life, his effective stake amounts to only about 0.23%.
Industry insiders predict that Kim could secure funding to acquire more shares in Hanwha Life if Hanwha Energy, in which he and his brothers hold stakes, goes public. However, the IPO process will take time.
Some observers argue that it is premature to discuss a financial affiliate separation, considering the time required for Kim to secure funds and the conservative nature of the financial sector compared to other industries.
A financial industry insider stated, “Among financial businesses, the insurance sector is especially conservative and heavily regulated,” adding, “It will be difficult to push for a swift separation of financial affiliates from the group, and this should be viewed with a long-term perspective.”
Born in 1985, Kim has been laying the groundwork for a stable succession by achieving results in the global financial market while working at Hanwha Life for over a decade. However, he has not yet been appointed as an internal director.
He joined Hanwha L&C in 2014, began his career as the head of the Digital Team at Hanwha Group’s Strategy and Planning Office, then transferred to Hanwha Life in December 2015. There, he served as Deputy Head of the Corporate Innovation Office, and was later promoted to Senior Managing Director, Executive Director, and Executive Vice President. In February 2023, he was promoted to President and appointed as Chief Global Officer.
#HanwhaGroup #HanwhaLife #KimDongwon #financialseparation #holdingcompany #succession #financialsector #HanwhaFinancial #HanwhaEnergy #governancestructure
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- Crying Then Smiling: Samsung Semiconductor Profit to Soar from Q1 to Q4
- Samsung Electronics is estimated to have posted sluggish earnings in the first quarter of 2025 due to the off-season effect in the semiconductor sector, a decreased share of high-bandwidth memory (HBM) revenue, and continued losses in the foundry (semiconductor contract manufacturing) business.
However, with prices of general-purpose DRAM and NAND flash beginning to rebound and expectations for the supply of HBM3E 12-layer chips in the second half of the year, along with increased memory capacity in smartphones, semiconductor profits are forecast to surge later this year.
Operating profit from semiconductors, which is expected to reach only around KRW 300 billion (US$ 216 million) in the first quarter, is projected to rebound sharply to over KRW 8 trillion (US$ 5.77 billion) in the fourth quarter, becoming the main driver of Samsung Electronics’ overall performance this year.
On April 1, financial information provider FnGuide estimated Samsung Electronics’ first-quarter earnings consensus (average projections by securities firms) on a consolidated basis to be KRW 77.12 trillion (US$ 55.6 billion) in revenue and KRW 5.16 trillion (US$ 3.72 billion) in operating profit.
Compared to the same period last year, revenue is expected to grow by 7.23%, while operating profit would drop by 21.94%. The consensus for full-year 2025 operating profit stands at KRW 31.46 trillion (US$ 22.7 billion), down 4% from last year.
Samsung Electronics is expected to announce its preliminary first-quarter earnings as early as April 7.
Recently, several securities firms have projected Samsung Electronics’ first-quarter operating profit to fall short of even KRW 500 billion (US$ 360 million).
NH Investment & Securities estimated Samsung Electronics' first-quarter operating profit at KRW 4.74 trillion (US$ 3.42 billion). It also projected the operating profit from the semiconductor (DS) division to be only KRW 307 billion (US$ 221 million).
Ryu Young-ho, a researcher at NH Investment & Securities, said, “Samsung Electronics is expected to hit its annual low point in the first quarter due to a reduced share of HBM revenue, which drove DRAM sales growth in Q4 last year, weak NAND flash performance, and foundry losses,” adding, “This weak first quarter has already been anticipated.”
Lee Su-rim, a researcher at Daishin Securities, also diagnosed that “continued losses from low utilization rates in the foundry sector and the shift to losses due to inventory adjustments and production cuts in NAND flash are the main factors behind the deterioration of Samsung Electronics’ Q1 performance.”
However, investors are paying more attention to the rebound in memory semiconductor prices than to the poor earnings.
According to market research firm DRAMeXchange, the fixed transaction price of high-performance DDR5 (DDR5 16Gb 2Gx8) DRAM as of March 31 was US$ 4.25, up 11.84% from February. NAND flash prices have also been rising for three consecutive months since January.
Market research firm TrendForce forecast that prices of DRAM, including HBM, will increase by up to 8% in the second quarter compared to the first quarter, while NAND flash prices could rise by up to 5%.
Due to a supply shortage where DRAM and NAND flash production cannot meet customer demand, urgent orders from clients are said to be increasing rapidly. As a result, Samsung Electronics is expected to push for price hikes in DRAM and NAND from April.
△ DS Division Performance to Improve in Second Half
Samsung Electronics' DS division is likely to see greater performance improvements in the latter half of the year.
Mass production of fifth-generation HBM, known as HBM3E 12-layer, is expected to begin as early as the third quarter, with supply to NVIDIA to follow. Samsung Electronics has redesigned the DRAM used in HBM3E and aims to pass the HBM3E 12-layer quality test in the second quarter of this year.
Vice Chairman Jeon Young-hyun, head of Samsung Electronics’ DS division, said during the regular shareholders' meeting on March 19, “Due to a delayed initial response to the AI semiconductor market, profitability improvements in memory products have also been delayed,” adding, “Starting from the second quarter or, at the latest, the second half of this year, we will shift to HBM3E 12-layer production and ramp up output to meet customer demand.”
The expansion of memory capacity in the iPhone 17 is another factor boosting expectations for improved performance at Samsung Electronics.
The iPhone 17 series, which Apple is set to unveil in the second half of this year, is expected to increase DRAM capacity from the current 8 gigabytes (GB) to 12GB in order to support the operation of its AI system, “Apple Intelligence.”
Kim Dong-won, a researcher at KB Securities, said, “The increase in memory capacity in the iPhone 17 will serve as a catalyst for future mobile DRAM demand,” predicting that “the demand growth rate for DRAM and NAND from 2025 to 2026 (15%) will exceed the supply growth rate (10%).”
KB Securities projected that Samsung Electronics' DS division operating profit will surge from KRW 2.8 trillion (US$ 2.02 billion) in the second quarter to KRW 6.3 trillion (US$ 4.54 billion) in the third quarter and KRW 8.1 trillion (US$ 5.84 billion) in the fourth quarter.
Even U.S. investment bank Morgan Stanley, which had been negative on the memory semiconductor sector, recently raised its target price for Samsung Electronics from KRW 65,000 to KRW 70,000.
Morgan Stanley researcher Shawn Kim said, “The expansion of the AI semiconductor market beyond the U.S. to other regions could work in Samsung Electronics’ favor,” adding, “Its strong financial structure provides excellent defense against economic downturns.”
#SamsungElectronics #semiconductor #HBM3E #DRAM #NANDflash #foundrybusiness #smartphones #AIchip #iPhone17 #memorymarket
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- Chung Eui-sun’s ‘Innovation DNA’ Powers Energy Drive as Hyundai E&C’s Lee Han-woo Boosts Profitability
- Lee Han-woo, CEO of Hyundai Engineering & Construction, is bringing Hyundai Motor Group Chairman Chung Eui-sun’s “innovation DNA” into the energy business.
As Lee takes the lead in innovating the industry by building a nuclear power-centered energy value chain, attention is focused on whether this will lay the groundwork for achieving Hyundai E&C’s highest-ever target operating profit margin of 8%.
According to Hyundai E&C on March 31, Lee has set a plan to generate more than one-fifth of the company’s total revenue from the energy sector within five years on a standalone basis.
In numbers, this means over KRW 5.1 trillion (US$ 3.68 billion), or 21% of the company’s projected KRW 25 trillion (US$ 18.03 billion) in total revenue by 2030.
Considering that this year’s energy revenue target stands at about 3% of total sales, or approximately KRW 470 billion (US$ 339 million), it is an aggressive goal to increase that by more than tenfold in just five years.
During the company’s first-ever “CEO Investor Day,” held on March 28—the first of its kind for a listed construction firm—Lee introduced three key growth strategies under the name “H-Road”: energy transition leadership, expanding global market dominance, and enhancing core products and intrinsic competitiveness. Notably, energy was placed first.
Lee stated, “We aim to successfully implement H-Road and grow our annual order volume from KRW 17.5 trillion (US$ 12.62 billion) in 2025 to KRW 25 trillion (US$ 18.03 billion) by 2030,” adding, “In particular, we will increase the share of energy revenue to 21%.”
The inclusion of CFO Kim Do-hyung and New Energy Business Division Head Choi Young, alongside CEO Lee as presenters at the event, is interpreted as a sign of Hyundai E&C’s strong commitment to expanding its energy business.
Lee’s energy strategy can be summarized as taking the lead in innovation to secure early dominance in the market as a “first mover.”
Hyundai E&C anticipates the global energy market will grow from 26,700 TWh in 2021 to as much as 66,000 TWh by 2051—more than double—making now the right time to lead in the energy sector.
The company plans to focus on nuclear power and renewable energy, which are gaining attention amid rising energy demand and concerns over energy security and supply stability.
Hyundai E&C aims to establish a comprehensive energy value chain encompassing production, storage, transportation, and utilization by expanding its influence from large-scale nuclear plants to small modular reactors (SMRs) and hydrogen production plants, while also introducing new package solutions.
Lee especially positions the nuclear business, backed by Hyundai E&C’s strong construction capabilities, as the centerpiece for leading energy innovation.
Hyundai E&C has a long history in nuclear power: from Korea’s first nuclear plant, Kori Unit 1 in 1971; to Hanbit Units 3–6, the first Korean-led project; to the first pressurized heavy water reactors, Wolsong Units 1 and 2; and to the first Korean-designed reactors, Saeul Units 1 and 2. With Shin Hanul Units 1–4, the company has now built 20 large reactors as lead contractor.
In addition, it has experience constructing 10 reactors simultaneously, participated as lead contractor for the UAE’s Barakah Units 1–4—the first nuclear export project from Korea—and is now pursuing the Kozloduy Units 7 and 8 project in Bulgaria, the first AP1000 deployment in Europe. The company is also working to gain a foothold in SMRs and nuclear decommissioning and remodeling.
Starting this year, Hyundai E&C plans to finalize the EPC contract for the Kozloduy Units 7 and 8 and begin construction on the U.S. SMR project, which it became the first Korean builder to design for commercialization.
Looking to the future, it is actively conducting joint research with the Korea Atomic Energy Research Institute on fourth-generation SMRs such as molten salt reactors (MSR) and sodium-cooled fast reactors (SFR), as well as nuclear-based hydrogen production and decommissioning.
Some view Lee’s energy leadership strategy as a sign that Chung Eui-sun’s vision for the group is extending to its construction affiliates.
In the business world, many attribute the Hyundai Motor Group’s success—now in Chairman Chung’s fifth year—to his “first mover” strategy.
Hyundai Motor and Kia sold 7.23 million vehicles globally last year, ranking third in market share.
While the group had long remained around fifth place globally, except for a brief rise to fourth in 2020, it climbed to third in 2022 and has maintained the spot for three consecutive years.
Hyundai’s development of the E-GMP dedicated electric vehicle platform, which allowed the group to take early leadership in the global EV market and enhance its brand image, as well as its technological leadership in hydrogen vehicles, are considered key achievements of Chairman Chung.
In his inauguration speech in October 2020, Chung emphasized core values like a “creative group spirit that makes the impossible possible” and a “pioneer” mindset. In his New Year’s message this January, he stated, “We’ve continually transformed ourselves to pursue change and innovation, and we possess the Hyundai Motor Group DNA to overcome any challenge or adversity.”
Lee’s push for leadership in energy is seen as a strategy to shift the paradigm of a construction industry facing growth limits and to ensure stable profitability.
The residential business, which has long been the core of Korea’s large construction firms, has entered a phase where notable growth is no longer feasible. With ongoing construction cost hikes, even serving as a cash cow is becoming difficult.
Hyundai E&C’s highest operating profit margins in the past decade were 6.2% consolidated and 5.3% standalone in 2016. On average, margins have remained below 4%.
Considering Lee’s goal of achieving an 8% operating margin by 2030 both on a consolidated and standalone basis, expectations are high for the energy business.
Given the company’s solid profits from past nuclear projects, Hyundai E&C is expected to achieve even better profitability by positioning itself as a leader across the entire energy value chain.
Over the past 10 years, Hyundai E&C has earned an average annual revenue of KRW 346.3 billion (US$ 249.6 million) and a gross profit of KRW 29.7 billion (US$ 21.4 million) from large-scale nuclear projects, with a gross profit margin of 8.6%.
In addition to focusing on energy-driven growth, Hyundai E&C is also emphasizing the establishment of a sophisticated management system as a strategy to secure profitability.
The securities industry also holds a positive view of Hyundai E&C’s energy-centered future strategy.
Shin Dae-hyun, an analyst at Kiwoom Securities, said, “Hyundai E&C’s 2030 operating profit target may appear high, but considering its strong position in Seoul-based redevelopment and complex projects, along with its shift away from simple construction toward nuclear dominance, the company is likely to surpass its recent low-single-digit margin levels.”
Kim Se-ryeon, an analyst at LS Securities, commented, “Given the limits of growth in Korea’s housing market, the gap will widen between companies that find new growth engines and those that don’t,” adding, “Hyundai E&C’s financial goals appear realistic, based on tangible business areas like large-scale nuclear, SMRs, and domestic development projects.”
At the CEO Investor Day, Lee said of the nuclear business, “We are expanding our partnerships with global companies across Bulgaria, the U.S., and Europe. We possess the flexibility of nuclear technology that can be applied to various industries,” adding, “Through international cooperation, we aim to go beyond simple EPC and jointly explore new business opportunities while providing optimal solutions.”
#HyundaiEandC #LeeHanwoo #ChungEuisun #nuclearenergy #SMR #energytransition #Hroadstrategy #constructionindustry #HyundaiMotorGroup #cleanenergyinitiative
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- HLB’s Jin Yang-gon to Try Again After Second FDA Rejection of Liver Cancer Drug
- “It breaks my heart that our plan to establish a lineup of three cancer treatments by next year and grow into a big pharma company focused on oncology by 2030 is being delayed.”
This is what Jin Yang-gon, Chairman of HLB Group, said on March 31 ahead of a shareholder meeting held after the annual general meeting at the Daejeon Convention Center in Yuseong-gu, Daejeon.
On this day, Chairman Jin repeatedly apologized to shareholders for the second failed attempt to bring rivoceranib to the U.S. market.
Unlike last year’s general meeting, which was filled with anticipation for FDA approval and entry into the U.S. market, this year’s meeting—held after two failed attempts—was marked by a heavy silence.
However, Jin maintained his confidence, stating that after receiving a Complete Response Letter (CRL) from the U.S. FDA on March 21, he plans to reapply for approval as quickly as possible.
Immediately after the general meeting, during the shareholder Q&A session, most questions focused on the process following the CRL.
Normally, when a pharmaceutical company receives a CRL, it sends a “Post Action Letter” to the U.S. FDA to understand the specific deficiencies pointed out.
The FDA then responds, and based on the details received, the company typically proceeds to address the deficiencies.
Chairman Jin had already announced a broad plan to reapply for drug approval as soon as possible after receiving the CRL on March 21.
At the time, he stated that once the specific deficiencies were confirmed, the company planned to resubmit its application to the FDA by May.
He also projected that if the identified issues were at the currently estimated level, the review would be classified as Class 1 (document-level deficiencies), allowing approval as early as mid-July.
At the meeting, shareholders voiced concerns about whether the manufacturing facility of China’s Hansoh Pharmaceutical—the producer of camrelizumab used in combination with rivoceranib—was once again flagged, as it had been in the first CRL.
Chairman Jin responded that while the Post Action Letter had not yet been received and the exact reasons were still unknown, he did not believe the issue was serious.
He said, “I’m the one most eagerly waiting for the response to the Post Action Letter,” adding, “Although the details aren’t clear yet, FDA experts who’ve joined our U.S. subsidiary ElevateBio believe the presumed issues don’t require re-inspection, which would cause longer delays.”
Shareholders also raised various concerns about Hansoh Pharmaceutical.
Issues raised included whether the China-based drug manufacturer could be affected by U.S.-China tensions, and whether Hansoh had genuine interest in bringing camrelizumab—which is currently used in combination therapy with rivoceranib—into the U.S. market, despite being a global pharmaceutical player.
Chairman Jin replied, “Hansoh Pharmaceutical is the world’s eighth-largest drugmaker, and camrelizumab is already a blockbuster drug generating KRW 1.5 trillion (US$ 1.08 billion) in annual revenue in markets like China.” He added, “Camrelizumab is the product that built today’s Hansoh Pharmaceutical, so I believe they will be committed to resolving this issue.”
He also said that Hansoh is actively engaged in discussing the matter and is willing to share information within the bounds of what can be made public.
Jin noted, “When we received the first CRL last year, Hansoh didn’t initially share detailed information, but this year they shared it immediately, showing a shift in attitude,” adding, “While the decision to disclose the Post Action Letter rests with Hansoh, if they share it, HLB will also share it with the market to the greatest extent possible.”
Throughout the session, Jin repeatedly apologized and emphasized his determination to succeed this time.
He said, “As the top decision-maker, I take full responsibility for the delays and sincerely apologize,” adding, “But it’s not over until it’s over, and I believe the real way to take responsibility is to quickly recover and deliver results.”
#HLB #JinYanggon #rivoceranib #FDAapproval #CRL #camrelizumab #HansohPharmaceutical #oncology #bigpharma #biotechKorea
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- Kim Beom-soo Never Saw Kakao as 'Big Tech'—Raising Doubts About Its Survival in the AI Era
- The term ‘Nekao’ refers to the two major pillars of Korea’s IT industry: Naver and Kakao.
Kakao has long been referred to as one of Korea’s representative “big tech” companies alongside Naver. But is Kakao truly a “tech” company? How does Kakao’s founder Kim Beom-soo define the company’s identity?
Kakao categorizes its business domain as “manufacturing service industry” in its annual report. This is a stark contrast to Naver, which defines itself as “Korea’s representative IT tech company” in its own report.
◆ Distance from technology evident in board composition
From its board composition, it’s clear that Kakao emphasizes platform business over technology. Among the three internal board directors, CEO Chung Shin-ah majored in business administration, CFO Shin Jong-hwan also studied business administration, and CA Council Compliance Team Leader Cho Seok-young has a law degree. Most of the outside directors also come from humanities and social science backgrounds, such as business, advertising, political economy, and law.
The only board member with a STEM background is outside director Park Sae-rom, an assistant professor in the Department of Industrial Engineering at the Ulsan National Institute of Science and Technology.
The same applies to Kakao’s top decision-making body, the CA Council. It focuses on brand communication, ESG, responsible management, and strategy—all areas centered on management and platform operations. There are no technology or AI experts in the CA Council.
Both the board of directors and the top decision-making body emphasize management and strategy rather than technology, clearly reflecting Kakao’s corporate identity.
◆ Connecting technology over internalizing it: a platform company’s strategy
Kakao is a platform company. From the very beginning, founder Kim Beom-soo’s strategy was not to develop and sell technology, but to connect with people who have technology and distribute it.
In fact, Kakao has focused more on external partnerships and ecosystem building than on developing its own technology.
Kakao’s services—whether in finance (Kakao Pay), content (Kakao Entertainment), mobility (Kakao T), or commerce (Kakao Makers)—all center around “connection.”
In a 2012 interview with a Korean media outlet, Kim Beom-soo said, “We’re thinking about creating a virtuous cycle between content and commerce through the KakaoTalk platform.”
The emphasis was on “structure” rather than technology. And that structure is the “platform.”
◆ In an era of intense tech competition, is a platform strategy enough?
The challenge is that we now live in an era of intense “technology competition.” OpenAI, Google, Meta, and Microsoft are all directly developing technology and investing billions of dollars to build AI ecosystems in the generative AI battlefield.
Domestic competitor Naver is also accelerating its transformation into an AI company by internalizing AI technology through “HyperCLOVA X.”
Meanwhile, Kakao continues AI R&D through Kakao Brain and Kakao Enterprise, but the AI agent “Kananah” announced last year has yet to begin even a closed beta test (CBT).
Concerns are also rising about unstable tech leadership, especially with the departure of Kim Il-doo, the former head of Kakao Brain and a key figure in AI development, in June 2024.
◆ Platforms over tech, focus on collaboration and connection instead of going solo
Of course, there’s no need to develop every piece of technology in-house.
In fact, many automakers are competing to advance autonomous driving technology, but more and more world-renowned automakers like Volkswagen, Ford, and General Motors (GM) are choosing not to develop their own autonomous driving platforms.
Kakao also appears to be seeking its own “Kakao-style” solution.
Using the KakaoTalk platform—the most dominant in Korea—as a foundation, the company is exploring a structure that creates new services by connecting with various tech firms, focusing on “linking” and “coordinating” external technologies rather than developing them in-house.
A prime example is the recently announced partnership with OpenAI, a company known for its world-class technological capabilities.
Of course, this doesn’t mean Kakao has completely abandoned internal tech development. Kakao is currently trying to find a balance between technology and platform. Not everything has to be built from scratch.
An industry insider said, “Kakao is stronger at connecting than at creating,” adding, “The AI service ‘Kananah’ that Kakao is preparing will likely incorporate OpenAI’s latest AI technologies.”
#Kakao #KimBeomSoo #AIstrategy #KakaoTalk #OpenAI #platformbusiness #techindustry #KakaoBrain #Kananah #SouthKoreaIT
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- LG Chem’s Shin Hak-cheol Targets U.S. with Koo’s Battery Push, Aligns with Trump
- Shin Hak-cheol, Vice Chairman of LG Chem, is expected to accelerate investments in battery materials in the United States this year.
Expanding local production of battery materials in line with U.S. President Donald Trump's policy direction of internalizing the manufacturing value chain is becoming increasingly important in LG Chem’s business strategy.
However, there is a movement within the United States to reduce support under the Inflation Reduction Act (IRA) following the launch of the Trump administration. Nevertheless, if the Trump administration maintains its policy stance of supporting batteries and materials, Shin's investments in the U.S. are likely to gain further momentum.
On March 28 local time, LG Chem participated in the "Tennessee Manufacturing Forum," a policy forum hosted by the Tennessee Chamber of Commerce.
At the forum, Ko Yoon-joo, Executive Vice President and Chief Sustainability Strategy Officer (CSSO) of LG Chem, participated in a policy discussion on the development of advanced industries and strengthening the materials supply chain in the U.S.
Since December 2023, LG Chem has been investing KRW 2 trillion (US$ 1.44 billion) to build a cathode materials production plant in Tennessee. Once completed in 2026, the plant will have an annual production capacity of 60,000 tons, making it the largest cathode materials facility in the United States.
This investment is seen as part of LG Chem’s broader effort to strengthen communication with the local industrial community.
For Vice Chairman Shin, expanding battery material production in the U.S. is a key task for this year. This aligns with LG Group Chairman Koo Kwang-mo's emphasis on batteries as a core business for the group.
At LG’s annual general shareholders’ meeting on March 26, Chairman Koo stated in a written message, “Industries like batteries are not only future national core industries but also key businesses for the group that we must grow.”
Accordingly, Vice Chairman Shin has set a plan to reduce LG Chem’s total capital expenditures by about KRW 1 trillion (US$ 721 million) this year, considering uncertainties in the petrochemical industry, while concentrating investments on batteries and eco-friendly materials.
On March 27, during the first group CEO meeting of the year held at the LG Academy in Icheon, Gyeonggi Province, Chairman Koo also told the CEOs, “It’s unrealistic to do well in all businesses, and that’s why it’s all the more necessary to make choices and focus.”
Expanding the battery business also carries symbolic meaning for Chairman Koo, as it continues the legacy of his predecessor.
The late Koo Bon-moo, former Chairman of LG, first encountered secondary batteries during a business trip to the U.K. in 1992. He identified them as a new growth engine for LG and launched the business in earnest by establishing a battery research center at LG Chem in 1995. The late Chairman Koo is remembered as a visionary leader who, even back then, envisioned applying batteries as a power source for vehicles.
Globally, the main demand sources for large batteries are energy storage systems (ESS) and electric vehicles, and the U.S. is widely expected to show the most rapid growth among major markets.
In particular, since the Trump administration took office this year, the U.S. has been emphasizing the internalization of value chains across key industries, focusing on local production. Alongside semiconductors and automobiles, batteries are one of the core industries where the U.S. seeks to internalize the value chain.
For Vice Chairman Shin, targeting the U.S. market is essential to achieving success in the group’s battery business strategy.
The fact that the U.S. urgently needs to raise its domestic production rate for battery materials presents an opportunity for Shin to expand his business.
According to market research by S&P, the U.S. has achieved about a 75% domestic production rate in electric vehicle batteries, thanks to increased local investment by Korea’s three major battery companies, including LG Energy Solution.
However, domestic production rates for battery materials such as cathodes and precursors are still significantly low.
If LG Chem expands its production capacity for battery materials in the U.S., it can address President Trump’s desire to strengthen domestic manufacturing of battery materials, thereby creating a favorable environment for receiving government support.
Moreover, Tennessee, where LG Chem is building its battery plant, is governed by a Republican politician, the same party as President Trump.
Still, Vice Chairman Shin may adjust the pace of local investments, considering policy uncertainties under the Trump administration.
There are growing expectations that IRA benefits will be reduced after the launch of the Trump government. LG Chem is facing unpredictable policy variables, including uncertainty around the continuation of the Advanced Manufacturing Production Credit (AMPC), which had been granted under the previous Biden administration.
According to major foreign media, the prevailing view is that while the Trump administration may reduce support for electric vehicle purchases under the IRA, it is likely to maintain AMPC support for the battery and materials industry to build domestic value chains. This scenario would be a fortunate development for LG Chem.
At the recent InterBattery exhibition held at COEX in Gangnam-gu, Seoul, Vice Chairman Shin responded to reporters’ questions about U.S. investments by saying, “We are closely monitoring the situation due to various changes.”
#LGChem #ShinHakcheol #BatteryMaterials #TennesseeInvestment #KoreanBatteryIndustry #TrumpAdministration #IRA #BatterySupplyChain #ElectricVehicles #CathodeProduction
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- Hotel Shilla's Two Secret Weapons by Lee Boo-jin Rise Fast, Offering Support Amid Duty-Free Slump
- Lee Boo-jin, President and CEO of Hotel Shilla, is seeing a rebound in the performance of the subsidiaries she identified as new growth engines.
While the earnings of these subsidiaries are not enough to offset the deficit from the struggling Shilla Duty Free business due to the downturn in the duty-free market, they are starting to provide Hotel Shilla with a modest cushion to lean on.
According to performance data released on March 28, the two wholly owned subsidiaries of Hotel Shilla—SBTM and SHP—have shown a clear trend of improving profitability over the past three to four years.
SBTM specializes in business travel solutions, including flight and train bookings, hotel and meal reservations, and visa processing. SHP is a company that manages fitness clubs under consignment.
These two companies came into the spotlight after Lee first mentioned them as future growth drivers during a regular shareholders' meeting three years ago.
At the time, Lee said, “New growth businesses such as SBTM and SHP will actively implement growth strategies across both online and offline channels through swift and efficient decision-making.”
The fact that the two companies highlighted by Lee are now delivering improved results suggests that Hotel Shilla's growth strategy is beginning to take root.
Looking at SBTM alone, its revenue has fluctuated. It recorded KRW 44 billion (US$ 31.7 million) in 2021, KRW 36.5 billion (US$ 26.3 million) in 2022, KRW 34.8 billion (US$ 25.1 million) in 2023, and KRW 36.7 billion (US$ 26.5 million) in 2024.
However, the trend is different when it comes to net profit. SBTM’s net profit rose from KRW 1.075 billion (US$ 775,200) in 2021 to KRW 1.079 billion (US$ 777,100) in 2022, KRW 1.985 billion (US$ 1.43 million) in 2023, and KRW 3.677 billion (US$ 2.65 million) in 2024. In terms of net profit margin, it rose more than fourfold from 2.4% in 2021 to 10.0% in 2024.
SBTM’s operating profit also showed a rising trend: KRW 1.2 billion (US$ 866,000) in 2021, KRW 1.567 billion (US$ 1.13 million) in 2022, KRW 1.7 billion (US$ 1.22 million) in 2023, and a sharp increase to KRW 4.3 billion (US$ 3.1 million) in 2024.
This growth appears to be driven by an increase in overseas business trips by Samsung Group affiliates, which make up the majority of SBTM’s client base. The company suffered during the COVID-19 pandemic due to travel restrictions but has been stabilizing in the post-pandemic endemic phase.
In 2023, internal transactions with Samsung Group accounted for KRW 26.6 billion (US$ 19.2 million), or 76.4% of SBTM’s total revenue of KRW 34.8 billion (US$ 25.1 million). Of this, Samsung Display accounted for KRW 13.8 billion (US$ 9.95 million), Samsung Electronics KRW 9.3 billion (US$ 6.7 million), Samsung Electro-Mechanics KRW 850 million (US$ 613,100), and Samsung SDI KRW 742 million (US$ 535,000).
SBTM was in a tough spot as recently as 2021, partly due to frequent leadership changes. After being established in October 2017, the company was led for three and a half years by former CEO Ko Kyung-rok, who stepped down in May 2021. He was succeeded by Cho Jung-wook, then Executive Vice President of Hotel & Leisure at Hotel Shilla, but he resigned just four months later.
Park Min, who had served as head of new business planning at Hotel Shilla, was next appointed as CEO, but he also stepped down after four months.
The next CEO chosen by Lee Boo-jin was Lee Kang-il, a former executive of Hotel Shilla. He had quietly stepped down to become an advisor in Q4 2020 after the duty-free business took a hit from COVID-19, but returned a year later to lead the subsidiary.
Under CEO Lee Kang-il’s leadership, SBTM appears to be seeing results in its management efficiency efforts.
In 2024, SBTM's labor costs increased by about KRW 3 billion (US$ 2.2 million), but cost of sales and other operating expenses decreased by KRW 2 billion (US$ 1.4 million) and KRW 1.5 billion (US$ 1.1 million), respectively, leading to higher profitability.
SHP is also improving its profitability. Revenue rose from KRW 39.1 billion (US$ 28.2 million) in 2022 to KRW 58.2 billion (US$ 42 million) in 2023 and KRW 64.4 billion (US$ 46.4 million) in 2024. Net profit increased from KRW 3.6 billion (US$ 2.6 million) in 2022 to KRW 4.4 billion (US$ 3.2 million) in 2023 and KRW 5.1 billion (US$ 3.7 million) in 2024.
SHP was spun off as an independent legal entity in January 2022 from Hotel Shilla’s sports facility operations division. Hotel Shilla entered the fitness business in 1993 with the opening of the Samsung Sports Center.
Based on its know-how in operating fitness clubs, Hotel Shilla opened VANT in 2004, which at the time was the largest fitness club in Asia. SHP is now known to operate dozens of offline fitness locations.
The strong performance of SBTM and SHP is likely to provide some relief for their parent company, Hotel Shilla.
Due to the slump in the duty-free market, Hotel Shilla faced major difficulties last year. The duty-free distribution (TR) division recorded an operating loss of KRW 75.7 billion (US$ 54.6 million), effectively erasing the KRW 64.5 billion (US$ 46.5 million) in operating profit generated from the hotel and leisure segment.
Nonetheless, the improved profitability of the two subsidiaries, whose performance is included in Hotel Shilla’s consolidated results, is helping offset the overall operating loss to some extent.
SBTM is even being considered as a potential asset for sale as part of Hotel Shilla’s financial restructuring efforts.
A Hotel Shilla spokesperson commented, “The rumors about SBTM being up for sale are not true. Various options are being reviewed as part of our efforts to improve financial structure.”
#LeeBooJin #HotelShilla #SBTM #SHP #newgrowthengines #dutyfreemarket #corporatesubsidiaries #businessperformance #SamsungGroup #Koreanbusinessleaders
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- Chang In-hwa Sharpens POSCO Group’s Restructuring, Steel Competitiveness Gains Now Crucial
- Chang In-hwa, Chairman and CEO of POSCO Holdings, has changed.
Immediately after taking office, Chairman Chang displayed a gentle leadership style, embracing several executives who had previously followed former POSCO Holdings Chairman Choi Jeong-woo.
However, a year into his term, his leadership has taken a sharper turn with aggressive restructuring and personnel reshuffles.
What kind of changes will the POSCO Group undergo over the next two years?
◆ Chang In-hwa’s Relentless Drive for Reform
Chairman Chang is transforming the structure of POSCO Group through high-intensity restructuring.
The executive appointments carried out in December 2024 reflected Chang’s intentions to push for bold generational change, a zero-tolerance policy on safety incidents, increased internal promotions within business units, and expanded appointment of female executives.
The number of executives was significantly reduced from 92 to 62. The number of promotions was cut by more than 30% compared to previous years. Executives born before 1963 stepped down from the frontlines of management, while younger talent born in the 1970s was actively promoted.
In this wave of change, Lee Si-woo, former CEO of POSCO who served during former Chairman Choi’s tenure, and Jeon Joong-seon, former CEO of POSCO E&C and a close associate of Choi, also stepped down from management.
Chairman Chang is also carrying out structural reforms by divesting low-profit businesses and non-core assets.
In 2024 alone, he rebalanced 45 assets, including restructuring underperforming service centers in China and selling a heavy oil power generation company in Papua New Guinea, securing KRW 662.5 billion (US$ 477.8 million) in cash.
In 2025, POSCO plans to carry out additional restructuring of 61 businesses, aiming to secure KRW 1.5 trillion (US$ 1.08 billion) in cash.
This year, the dissolution of POSCO CNGR Nickel Solutions, a nickel refining joint venture with Chinese company CNGR, was decided. The sale of the Zhangjiagang Pohang Stainless Steel Plant in Jiangsu Province, China—classified as a low-profit asset—is also under review. POSCO International is proceeding with the partial sale of its textile plant operations in Uzbekistan, a business carried over from the Daewoo era.
The cash secured through these efforts will be reinvested into core growth businesses and used for shareholder returns.
#POSCOHoldings #ChangInHwa #restructuring #executivechange #assetdivestment #POSCOstrategy #businessreform #corporateleadership #Koreansteel #POSCOgroup
◆ Strengthening Steel Core Competitiveness, Chang In-hwa’s Determination
Chairman Chang expressed his commitment to strengthening the core competitiveness of POSCO’s steel business upon taking office.
At his inauguration ceremony on March 21, 2024, he said, “The steel business is the strong foundation of national industry and the group’s growth,” adding, “We will competitively develop innovative products that customers want, boldly promote equipment efficiency and process optimization, and build a coexistence ecosystem with demand industries.”
However, his strategy to strengthen core steel competitiveness did not yield short-term results amid a worsening business climate.
Last year, Korea’s steel industry faced an uncertain future due to the construction sector slump and aggressive price competition from Chinese steel imports.
On February 20, the Trade Commission of the Ministry of Trade, Industry and Energy issued a preliminary determination that domestic industries were being harmed by dumping of Korean hot-rolled steel plates. The ministry announced that it would release countermeasures in March to block circumvention of dumping via steel imports.
Global steel demand is also steadily declining.
At a seminar titled “Changes in the Trade Environment of the Steel Industry and Response Strategies,” held at the National Assembly on December 10, 2024, Lee Yoon-hee, a researcher at the POSCO Research Institute, stated, “Due to continued low growth in global steel demand, oversupply issues are resurfacing.”
He added, “Although positive growth in demand is expected for the first time in four years, the recovery remains below expectations,” and predicted that “without China’s will to restructure, efforts to correct the imbalance will face limitations.”
The deteriorating external environment led to a drop in performance.
In 2024, POSCO Holdings recorded revenue of KRW 7.688 trillion (US$ 5.55 billion) and operating profit of KRW 2.174 trillion (US$ 1.57 billion), down 5.8% and 38.4%, respectively, from 2023.
Despite this, Chairman Chang has remained focused not on short-term performance but on securing breakthrough opportunities through ultra-competitive manufacturing capabilities.
It is expected that the results of Chairman Chang’s determination will begin to emerge as early as this year.
China is now entering into steel industry restructuring. At the 2025 National People’s Congress and Chinese People’s Political Consultative Conference (known as the Two Sessions), China mentioned plans to control crude steel production and promote industrial restructuring in the steel sector.
The National Development and Reform Commission (NDRC) of China stated, “We will promote steel industry restructuring through production cuts,” adding, “We will introduce production reduction policies and industry regulations to end the current overheated competition.”
Reuters and other foreign media analyzed that China's steel production cut could reach up to 50 million tons annually in terms of crude steel.
Industry experts also predict that U.S. President Donald Trump’s policy of imposing a flat 25% tariff on imported steel and eliminating the quota system could benefit POSCO Group. Since POSCO has the capacity to mass-produce high value-added products through technological innovation, it is expected to benefit from the elimination of the quota system.
One such product is POSCO’s cryogenic high manganese steel, which became the world’s first to enter mass production.
High manganese steel is an alloy steel that contains 10–30% manganese in iron, capable of delivering various performance characteristics. It is a new material first developed by POSCO in 2013.
Chairman Chang’s persistence is often cited as the key reason POSCO was able to succeed in developing high manganese steel.
Drawing on his background as a researcher, Chang focused on high manganese steel development even during his time as POSCO President. For commercialization, he personally met with executives at Hanwha Ocean to persuade them to use high manganese steel in the fuel tanks of LNG-powered very large crude carriers (VLCCs).
High manganese steel is known for its high strength, excellent wear and corrosion resistance, and ability to withstand extremely low temperatures. Because of these properties, it is used in tanks that store liquefied natural gas (LNG) and in fuel tanks of LNG-powered vessels.
Considering President Trump is pushing forward an LNG project in Alaska, there is growing speculation that POSCO Group may benefit from it.
On March 4 (local time), in a speech at the U.S. Capitol in Washington, D.C., President Trump stated, “We are building one of the world’s largest natural gas pipelines in Alaska,” and added, “Japan, Korea, and other countries want to invest billions of dollars and become our partners.”
#POSCOHoldings #ChangInHwa #steelindustry #highmanganesesteel #manufacturingcompetitiveness #globalsteelmarket #Chinaovercapacity #Trumpsteelpolicy #LNGmarket #POSCOinnovation
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- Hanwha Backs Thriving Defense Business, While Kim Seung-mo Faces Financial Strain in Construction Division
- Hanwha Corporation, which serves as the holding company of Hanwha Group, is backing the defense business of its subsidiary Hanwha Aerospace by fully participating in the rights offering.
However, some view this move as adding financial burden to Kim Seung-mo, the President and CEO of Hanwha Corporation E&C Division. Although Kim, who also serves as Chairman of Hanwha’s board, made the decision to support the growth of the subsidiary through the capital increase, the construction division—which is already under pressure—could face additional cash outflows and rising debt.
According to Hanwha on March 27, the exact amount of Hanwha's participation in Hanwha Aerospace’s rights offering will be determined after the issue price is finalized on May 29.
Hanwha Aerospace, the defense affiliate of Hanwha Group, is set to conduct a KRW 3.6 trillion (US$ 2.6 billion) rights offering, with new shares to be listed on June 24.
In response, Hanwha held a board meeting the previous day and resolved to acquire all 1,620,298 shares allocated based on its 33.95% stake in Hanwha Aerospace at a tentative issue price of KRW 605,000 per share. The total amount is approximately KRW 980.3 billion (US$ 707.1 million).
Some in the market had speculated that Hanwha might forgo its rights due to tight funding. However, the full participation appears to reflect the parent company's intent to maintain its stake in a key subsidiary and restore market confidence at the group level.
Despite posting record-breaking results last year, Hanwha Aerospace is facing heavy criticism from the market for opting for the largest-ever rights offering in Korean corporate history, instead of using internal funds or loans.
Last year, Hanwha Aerospace posted an operating profit of KRW 1.7319 trillion (US$ 1.2489 billion) on a consolidated basis, nearly three times the figure from the previous year. As of the end of last year, it held KRW 2.9677 trillion (US$ 2.139 billion) in cash and cash equivalents.
While Hanwha Aerospace emphasizes the need for swift, large-scale overseas investments in response to rapidly changing global dynamics, Hanwha is framing its participation as part of enhancing shareholder value and responsible management.
At a shareholders' meeting on March 25, Hanwha Aerospace CEO Sohn Jae-il said, “We considered borrowing for the investment plan, but a sharp rise in the debt ratio and worsening financial structure would be a disadvantage in competitive bids,” adding, “The rights offering was the best choice.”
President Kim Seung-mo also stated in a press release the previous day, “I agree on the need for bold investment by Hanwha Aerospace, and I’m participating in the rights offering to enhance shareholder value and fulfill our responsibility as the major shareholder.”
In its disclosure on the participation, Hanwha described Hanwha Aerospace as “a subsidiary expected to see continued high growth,” signaling strong confidence in the group's defense business.
Analysts inside and outside the market believe Hanwha Aerospace is gaining growth momentum, which may ease some pressure on President Kim. However, there is also notable concern that the rights offering could bring both positive and negative implications for Hanwha.
Hanwha plays the role of the holding company at the top of the group’s governance structure. It holds stakes in major subsidiaries such as Hanwha Solutions (36.15%) and Hanwha Life Insurance (43.24%), in addition to Hanwha Aerospace.
Hanwha Aerospace is considered Hanwha’s most valuable subsidiary. Its performance directly impacts Hanwha’s consolidated earnings and financial health.
Particularly, Hanwha Aerospace's earnings and financial indicators are expected to have a positive impact on Hanwha’s credit rating.
Korea Investors Service and NICE Investors Service cite the improved creditworthiness and financial structure of core subsidiaries like Hanwha Aerospace as factors supporting an upgrade to Hanwha’s credit rating (A+). This is especially important as Hanwha Solutions (AA-) recently received a “negative” outlook due to poor performance and declining financial stability, making Hanwha Aerospace even more critical.
On March 21, Korea Investors Service noted in a report on the rights offering, “We will monitor changes in the creditworthiness of Hanwha Solutions and Hanwha Aerospace, which support Hanwha’s credit rating,” adding, “Hanwha Aerospace (AA-/Stable) is expected to see a positive impact on its credit rating due to the capital increase from the rights offering.”
On the other hand, there is criticism that the parent company is bearing the burden of financing investments in a strong-performing subsidiary. This could place a heavy strain on President Kim, who leads Hanwha’s construction division, especially as the division is under pressure to improve its finances amid recent underperformance.
Hanwha plans to fund its KRW 980 billion (US$ 707 million) participation in the rights offering through a combination of cash and financing.
Although only an overall plan has been announced and specific figures are yet to be determined, Hanwha’s current financial position shows limited cash reserves, which is considered a burden.
As of the end of last year, Hanwha held KRW 186.8 billion (US$ 134.7 million) in cash and cash equivalents on a separate (non-consolidated) basis.
For a company like Hanwha, whose core business is construction, this figure ranks third-lowest among the top 20 construction firms by the Ministry of Land, Infrastructure and Transport's construction capability assessment, after Kumho Construction (KRW 182.1 billion or US$ 131.3 million) and Seohee Construction (KRW 184.8 billion or US$ 133.2 million).
As the construction industry struggles at the bottom of a downturn, many companies are striving to secure liquidity to ensure stability. However, with limited available cash, Hanwha’s construction division appears to be moving in the opposite direction by participating in Hanwha Aerospace’s rights offering.
In reality, most of the capital for the rights offering is expected to come from borrowings, which would likely increase the debt ratio—a key indicator of financial soundness.
Hanwha’s separate debt ratio rose to 220.9% at the end of 2022 after merging with Hanwha Construction, then fell to 209% at the end of 2023, and again to 194.3% by the end of last year. However, the rights offering participation this year introduces a new factor for an increase. It appears that Hanwha, not Hanwha Aerospace, will absorb the impact of a rising debt ratio.
This financial burden could negatively affect Hanwha’s credit rating. Korea Investors Service and NICE Investors Service cite the increasing standalone financial burden as a factor that could lead to a downgrade in Hanwha’s credit rating.
However, Hanwha Group stresses that Hanwha still has access to liquidity and that, at the group level, the benefits of growing a key affiliate and enhancing shareholder value outweigh the risks.
It is understood that Hanwha used its cash holdings to repay debt and reduce the debt ratio, rather than hoarding cash, as part of a strategy to lower financial costs.
Hanwha Group explained that the company’s available funds in the short term exceed KRW 900 billion (US$ 649 million), well above its current cash and cash equivalents.
This figure includes KRW 180 billion (US$ 129.7 million) in cash and cash equivalents and undrawn credit lines. These undrawn lines refer to borrowing facilities that can be drawn or repaid as needed.
Korea Investors Service pointed out, “Since the exact amount of participation and funding plan for the rights offering has not yet been finalized, it is difficult to predict Hanwha’s actual funding burden and changes in financial structure, so additional monitoring is needed.”
A Hanwha Group official stated, “Hanwha’s borrowings and debt ratio will inevitably increase due to the rights offering participation,” but added, “However, the continued growth of Hanwha Aerospace will play a major role in increasing shareholder value not only for Hanwha Aerospace but also for Hanwha.”
#Hanwha #HanwhaAerospace #rightsOffering #defenseindustry #creditrating #financialburden #constructionbusiness #corporatefinance #Koreanconglomerate #subsidiarygrowth
