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- Despite value-up efforts, DGB Financial faces a "quiet" market; Hwang Byung-woo’s challenge to elevate the group.
- Hwang Byung-woo, Chairman of DGB Financial Group, faces a challenging path in advancing the group into a "national financial holding company." Despite announcing both Q3 earnings and a value-up plan aimed at enhancing corporate value, the group has struggled to meet market expectations due to underwhelming performance and a lack of concrete details in the plan.
According to securities industry reports on the 29th, it is anticipated that it will take considerable time for DGB Financial Group to achieve stable growth. One of the primary obstacles is the persistent impact of real estate project financing (PF) provisions centered on its securities subsidiary, iM Securities.
Kang Seung-geon, a researcher at KB Securities, noted, "DGB Financial Group faces risk from PF provisions related to its securities subsidiary iM Securities, impacting its risk-weighted assets (RWA)," adding, "Performance improvements are expected to be limited this year."
DGB Financial Group recorded a cumulative consolidated net income of KRW 252.6 billion (US$ 182.2 million) for the third quarter, a 40.5% year-over-year decline.
Although the banking subsidiary iM Bank posted its highest-ever quarterly results, the deteriorating performance of non-bank subsidiaries, particularly iM Securities, dragged down the group’s overall performance. Due to the impact of real estate PF provisions, iM Securities swung to a quarterly net loss.
In a conference call following the earnings announcement, DGB Financial Group expressed intentions to resolve the PF provisions issue by the end of this year.
However, market analysts predict normalization may not occur until after the project reassessment in November, suggesting a longer timeline for recovery.
Nam Min-wook, an analyst at DS Investment & Securities, remarked, "Considering the project re-evaluation in November, additional PF provisions in Q4 seem inevitable."
Alongside its Q3 earnings, DGB Financial Group announced a value-up plan focused on buying back and canceling KRW 150 billion (US$ 108.2 million) in shares by 2027.
However, the plan is criticized for lacking specifics when compared to the disclosures of other financial holding companies, as it only outlines mid- to long-term targets without immediate action plans.
The market reaction has been subdued as both the performance results and value-up plan failed to exceed expectations, with securities firms either lowering or maintaining target stock prices.
Seol Yong-jin, an analyst at SK Securities, commented, "DGB Financial Group's stock price will depend on its ability to safeguard 2024 earnings and implement its value-up plan as scheduled," downgrading his short-term investment rating to neutral.
Hwang, who took office as Chairman of DGB Financial in March, initially set the transition of Daegu Bank to a national bank as a top priority.
While iM Bank was launched in May after successfully achieving this status, the group is still seen as lacking the foundational strength required to be a true national financial holding company.
As of the previous day’s market close, DGB Financial Group's market capitalization stood at KRW 1.3938 trillion (US$ 1 billion), which is significantly lower compared to other regional financial groups like JB Financial Group and BNK Financial Group, each with market capitalizations in the KRW 3 trillion range.
There is also some skepticism regarding DGB’s capacity for shareholder returns, given the drop in net income compared to last year.
Financial data provider FnGuide projects that DGB Financial Group’s consolidated net income will fall by 17.4% in 2024 to KRW 320.3 billion (US$ 231 million) compared to 2023.
Hwang is undertaking efforts to elevate DGB Financial into a "national financial holding company." In September, he outlined a new mid-term strategy for the group, aiming to advance as a national financial group in line with iM Bank’s transition to a national bank.
Hwang commented at the time, "We will carefully manage risks and pursue portfolio reorganization and structural innovation to deliver satisfactory outcomes for all stakeholders, including shareholders," and promised to announce the group's "2030 Vision" by the end of this year to set a long-term strategy and vision as a national financial group.
However, aside from achieving the transition to a national bank, there have been no significant visible accomplishments in Hwang's first year as chairman. Industry experts predict concrete results may not materialize until after 2025.
Hwang is reportedly preparing to address the organizational structure of iM Securities, where the largest issues with PF provisions lie, as part of efforts to restore confidence in DGB Financial Group.
DGB Financial Group indicated its commitment to resolving the PF provisions issue by appointing a new head of the “PF Solutions” department at iM Securities during its Q3 earnings announcement, signaling its determination to address the issue externally.
On the same day, DGB Financial Group also expressed its intention to focus on improving its stock price and enhancing shareholder returns.
In a press release, the group stated, "We will work to faithfully implement our corporate value enhancement plan by conducting a targeted share buyback to increase the total shareholder return rate."
Hwang, as the first DGB Financial Group chairman to lead after iM Bank’s transition to a national bank, is regarded as well-suited to guide the group forward as a national financial holding company.
Born in 1967, Hwang joined Daegu Bank’s Economic Research Institute as a researcher in September 1995. He continued to work within the DGB Financial Group, rising to the position of head of iM Bank in January 2023.
In March 2024, Hwang became Chairman of DGB Financial Group while concurrently serving as head of iM Bank. In May 2024, Daegu Bank successfully transitioned to a national bank and was rebranded as iM Bank.
#DGBFinancialGroup #HwangByungwoo #NationalFinancialHolding #RealEstatePF #iMSecurities #iMBank #ShareholderReturns #KoreanFinance #FinancialPerformance #DGBGrowth
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- Economic Downturn Chills Hiring; Samsung, Only Top 4 with Open Recruitment, Also Narrows
- As domestic conglomerates face economic downturns, they are reducing recruitment in the second half of the year. Some companies have even scrapped new hiring plans entirely.
Samsung Group, the only one among the top four conglomerates to maintain an open recruitment process, is expected to reduce its hiring scale this year, narrowing the "big company hiring gateway" even further.
According to industry sources on the 29th, Samsung, which conducted the Global Samsung Aptitude Test (GSAT) for college graduates on October 26-27, is anticipated to hire significantly fewer new employees in the second half compared to last year.
The GSAT was held for Samsung Electronics, Samsung Display, Samsung Electro-Mechanics, Samsung SDI, Samsung SDS, Samsung Biologics, Samsung Bioepis, Samsung C&T, Samsung Heavy Industries, Samsung E&A, Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Card, Samsung Securities, Samsung Medical Center, Hotel Shilla, Cheil Worldwide, S-1, and Samsung Welstory.
Samsung previously announced plans in 2022 to hire 80,000 new employees over five years. This led to expectations of hiring around 10,000 people this year. However, facing internal and external challenges, particularly at Samsung Electronics, the group appears to be adjusting its hiring plans for college graduates downward.
An employee in Samsung Electronics' Device Solutions (DS) division said, “The semiconductor division is reallocating staff through departmental restructuring, so fewer new graduates are being hired this year. Recruitment of experienced hires is also minimized, except for specific Ph.D. candidates.”
Some even speculate that the number of new college graduates hired at Samsung Electronics this fall could drop to three-digit figures, rather than the usual four.
If Samsung, the only company among the top four conglomerates to maintain open recruitment, reduces its hiring scale, job seekers are likely to face even greater difficulties.
When asked about the scale of hiring, another Samsung Electronics official said, "It’s difficult to specify the exact hiring scale for the second half of this year, but it will largely adhere to the 2022 recruitment plan."
SK Group, Hyundai Motor Group, and LG Group have already transitioned from open recruitment to monthly rolling recruitment to more flexibly manage staffing in response to the business environment. Since around 2020, they phased out the open recruitment process, opting instead to announce large-scale hiring plans.
In 2022, SK Group and LG Group unveiled plans to create 50,000 domestic jobs over five years in future growth fields. Hyundai Motor Group announced early this year that it would hire 80,000 people over the next three years.
In contrast to Hyundai’s recent hiring expansion, SK Group and LG Group are reducing recruitment.
According to LG’s ESG report, the number of newly hired permanent employees increased slightly from 19,919 in 2021 to 20,498 in 2022 but fell to 16,639 in 2023. This figure includes hiring from LG, LG Electronics, LG Chem, LG Uplus, and LGCNS.
Recruitment at SK Group’s largest affiliates, including SK Hynix, SK Innovation, and SK Telecom, is also declining.
New hires at SK Hynix decreased from 3,901 in 2022 to 739 in 2023. Similarly, SK Innovation’s hires dropped from 2,029 to 1,246, and SK Telecom’s from 537 to 424 over the same period. SK Group is focusing on organizational efficiency through portfolio rebalancing, with most affiliates taking a conservative approach to hiring except for SK Hynix, which has benefited from improved market conditions for high-bandwidth memory (HBM).
The number of large companies not hiring at all in the second half of the year is also on the rise.
According to an August survey by the Federation of Korean Industries (FKI) of the top 500 companies by revenue, 57.5% of large companies had either not yet set recruitment plans or planned no new hiring for the second half. This represents a 0.9% increase in companies not planning to hire compared to the same survey in the second half of 2023.
Lee Sang-ho, head of FKI’s Economic & Industrial Headquarters, commented, “Amid a worsening economic environment, with concerns over global economic slowdown, sluggish domestic demand, and declining business sentiment, companies are expected to take a conservative approach to hiring. Government incentives are necessary to encourage new industries, corporate investment, and job expansion.”
#SamsungGroup #DGBFinancialGroup #KoreanEconomy #JobMarket #HiringFreeze #OpenRecruitment #Conglomerates #SKGroup #LGGroup #HyundaiMotorGroup
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- Shinsegae Group Leadership Transition Draws Attention: Focus Shifts from Lee Myung-hee to Chung Yong-jin
- The annual executive reshuffle at Shinsegae Group is imminent, with growing anticipation that Chung Yong-jin, the group's chairman, will play a dominant role this year, unlike in previous years.
In 2022, about 40% of affiliate CEOs were replaced, with Lee Myung-hee, the group’s honorary chairperson, leading the reshuffle.
However, since 2023 marks the first year that Lee passed the chairmanship to her son, it is widely expected that she will defer to Chung's leadership in the upcoming personnel changes.
According to sources in the retail industry on October 28, this year’s executive reshuffle is likely to reflect Chung’s vision and decisions more prominently.
Discussions around leadership influence surfaced during last year’s reshuffle when Chung reportedly opposed replacing Kang Hee-seok, the former CEO of Emart.
However, Lee insisted on Kang’s removal, despite his close relationship with Chung, established during their time together at Bain & Company. Kang was recruited by Chung to lead Emart in 2019.
At the time, Lee Myung-hee held the title of chairperson, while Chung Yong-jin served as vice chairman, making it natural for the chairperson’s views to carry more weight.
However, her direct involvement in executive decisions, breaking the usual practice of delegating to Chung and Chung Yoo-kyung (president of Shinsegae Department Store), was seen as unusual.
The situation has now shifted. In March 2023, Lee promoted her son to chairman, taking on the honorary chairperson title herself. This move was interpreted as her signaling Chung’s status as the group’s next leader while keeping herself available to intervene if needed.
However, eight months into Chung’s tenure, analysts believe it will be challenging for Lee to step back into the spotlight. The group is also keen to avoid any controversy over leadership disputes similar to those from last year.
Retail industry insiders argue that with Chung now officially holding the chairman title, it would be awkward if he were unable to exercise full authority over executive decisions.
Although he represented Shinsegae Group even as vice chairman, the symbolic weight of the chairman’s title makes it essential for him to take full control.
Additionally, with Lee delegating the chairmanship to her son and Chung Yoo-kyung expected to be promoted to vice chairperson, it is likely that Lee will leave personnel decisions to the siblings to further empower them.
There is also no clear affiliate within Shinsegae Group where Lee is expected to intervene directly this year. Last year’s reshuffle, led by Lee, already replaced 40% of affiliate CEOs.
Moreover, Chung’s flexible personnel policy has already resulted in leadership changes at underperforming affiliates, such as Shinsegae Construction, SSG.com, and Gmarket.
Chung’s post-promotion focus on management suggests that his influence will be significant in this year’s reshuffle. In the past,
Chung demonstrated a willingness to recruit external talent, appointing Kang Hee-seok as CEO despite Kang’s non-traditional background.
Although Kang's removal due to poor performance raised concerns, Chung’s executive choices this year are expected to differ.
Notably, since his promotion, Chung has practically stopped his usual activities on social media and reportedly quit golf, focusing solely on managing the group.
This intensified commitment indicates that Chung is likely to use his deeper understanding of the group to shape this year’s personnel decisions.
Some insiders suggest that Chung may use this reshuffle to promote internal talent he has personally identified, addressing internal dissatisfaction with the group’s frequent personnel changes.
Strengthening cohesion within the organization through his leadership choices could be one of his primary goals this year.
#ShinsegaeGroup #ChungYongjin #LeeMyunghee #executivereshuffle #corporategovernance #leadershiptransition #Koreamarket #retailindustry #personnelstrategy #executivedecisions
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- CJ Olive Young’s Lee Sun-jung Goes All-In on Experiential Stores to Capture Domestic and International Customers
- Lee Sun-jung, CEO of CJ Olive Young, is focusing on expanding experiential beauty stores to capture both domestic and international customers.
As CEO, Lee is aiming to enhance customer relationships through experiential marketing that leverages the strengths of physical stores, allowing direct engagement with consumers.
This approach is particularly timely given the rise of online competitors in the beauty sector, as CJ Olive Young looks to differentiate itself through a more hands-on, in-store experience.
According to CJ Olive Young, a growing number of stores are now emphasizing customer experience over product sales, designing spaces to provide expanded opportunities for beauty exploration.
For instance, the Olive Young store opening this November in Seongsu-dong, Seoul, named Olive Young N Seongsu, will focus on offering unique experiences not found in traditional stores, with the first floor specifically structured around interactive spaces.
Similarly, the Olive Young Seomyeon Town store in Busan recently underwent renovations to expand its experiential offerings.
Reopened on October 25, this store’s first floor is dedicated to a wide array of color cosmetics, allowing customers to find their personal shades through an AI-based “Pic Your Color” service.
CJ Olive Young categorizes its experience-focused stores as “Town Stores” and “Specialty Stores.” Unlike the standard stores spread across the nation, these are designed primarily to offer special experiences rather than focusing solely on sales.
Town Stores, located in key regions, reflect the latest Beauty & Health (B&H) trends and provide ample space for customers to immerse themselves in these offerings. There are currently over 20 such stores across Korea.
Specialty Stores reflect unique local characteristics, such as the Jeju Jungmun store, which features Dolhareubang statues and Jeju-exclusive products, as well as photo zones to capture these special moments, making the store a notable part of a Jeju travel itinerary.
Lee’s focus on expanding these experiential stores aligns with a strategic goal to foster customer loyalty in the face of competition from online platforms dominating the Beauty & Health market.
CJ Olive Young, a recognized leader in Korea’s offline beauty and health market, continues to post strong revenue.
In the second quarter of this year, it recorded sales of KRW 1.2079 trillion (approximately USD 870 million), achieving record quarterly revenue and marking four consecutive quarters with over KRW 1 trillion in sales.
However, Lee cannot overlook the rapid growth of online-based competitors like Musinsa and Kurly, which are aggressively expanding in the Beauty & Health sector.
Since the COVID-19 pandemic, e-commerce has increasingly supplanted offline retail across the distribution industry, and in the long term, market dominance may shift to online-based platforms in the Beauty & Health field as well.
To counter this trend, Lee is leveraging the unique strengths of offline retail, creating more opportunities for direct, tangible customer interactions to solidify customer relationships and maintain a stronghold in the market.
Lee is also leveraging experiential marketing to build a customer base in international markets. CJ Olive Young’s stores in popular tourist areas like Myeongdong, Dongdaemun, Hongdae, Gangnam, Incheon, Busan, and Jeju are managed as global shopping hubs.
These locations prioritize hiring multilingual staff and displaying product names and event information in English. To enhance convenience for international visitors, CJ Olive Young introduced devices in April capable of real-time translation into 16 languages across its nationwide stores.
CJ Olive Young expects that foreign shoppers’ in-store experiences will lead to repeat purchases on the Olive Young Global Mall upon their return home.
For instance, the Myeongdong Town store’s second floor now features a kiosk for signing up for Global Mall memberships, creating a link between online and offline shopping for foreign customers so they can continue their K-beauty experience post-visit.
In fact, Olive Young’s popularity among international visitors is spreading through social media.
Influencers with large followings and regular social media users alike are sharing their experiences at Olive Young, describing everything from exploring various product categories to tax refund methods for purchases.
Many tag Olive Young’s global account (@Oliveyoung_global), which links to the Olive Young Global Mall, encouraging further online purchases.
Lee Sun-jung became CEO of CJ Olive Young in October 2022 through internal promotion, making her the youngest CEO in CJ Group and the first female CEO of CJ Olive Young.
Her leadership continues to gain recognition, with the company achieving record annual performance last year and posting strong results every quarter this year.
Maintaining CJ Olive Young’s dominant position in Korea’s Beauty & Health market and demonstrating growth potential in international markets remain key challenges in her role.
#CJOliveYoung #LeeSunJung #KBeauty #BeautyRetail #ExperientialMarketing #TownStore #SpecialtyStore #GlobalMall #BeautyHealth #CustomerExperience
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- Hyundai’s Supernal Paves Way for ‘Air Taxi’ Commercialization, Advancing Chung Eui-sun’s Mobility Vision
- Hyundai Motor Group’s urban air mobility (UAM) subsidiary, ‘Supernal,’ is accelerating preparations for commercializing its air taxi services in the United States through collaborations with multiple companies, capitalizing on the country’s regulatory advancements.
Chairman Chung Eui-sun has outlined a vision to transform Hyundai Motor Group from an automotive manufacturer into a next-generation mobility enterprise that includes personal air vehicles, and ‘Supernal’ represents a significant step toward realizing this vision.
According to reports from ‘The Washington Post’ and ‘Bloomberg’ on the 28th, the U.S. Federal Aviation Administration (FAA) is refining regulations for urban air mobility, including ‘air taxis,’ to expedite the commercialization of these services.
The FAA has clarified the pilot training and certification processes required for UAM, setting the stage for commercial operations. The agency has also officially categorized electric vertical takeoff and landing vehicles (eVTOLs) as part of the U.S. air traffic system, allowing them to use existing airport and helipad infrastructure.
‘Bloomberg’ noted, “The FAA’s finalized regulations have brought air taxi commercialization one step closer,” and these regulatory updates are expected to give a boost to ‘Supernal’s’ development and business preparations as it targets U.S. commercial operations by 2028.
‘Supernal’ recently partnered with transport company ‘Blade Air Mobility’ and private jet firm ‘Clay Lacy Aviation,’ intensifying its focus on commercializing air taxis.
The company plans to launch its eVTOL model, the ‘S-A2,’ during the 2028 Los Angeles Olympics, with an annual production target of 100 to 200 units.
Beyond passenger air taxis, ‘Supernal’ is also pursuing growth opportunities in business-to-business (B2B) services, such as airport logistics and medical transport. The recent regulatory clarity surrounding UAM is expected to further facilitate ‘Supernal’s’ expansion into these areas.
The U.S. is projected to become the largest UAM market, where startups like ‘Joby Aviation’ and ‘Archer Aviation’ are currently considered leaders in eVTOL technology, both having completed successful test flights and targeting commercialization ahead of ‘Supernal,’ which has yet to conduct an official flight.
However, ‘Supernal’s’ competitive edge lies in Hyundai’s extensive experience in mass production, which it can leverage for efficient eVTOL production.
Unlike other firms reliant solely on external investment, Hyundai’s direct involvement in ‘Supernal’ offers advantages in production automation, knowledge sharing, and workforce exchange.
The latest ‘S-A2’ model, unveiled in January, also incorporates automotive design elements. ‘Supernal’s’ CTO David McBride expressed confidence, stating to the aviation journal ‘Vertical,’ “While we may not be the first to launch an eVTOL in the market, we could be the first to mass-produce it.”
Hyundai’s focus on UAM as a future growth engine, supported by group-wide resources, is another significant advantage.
Back in October 2019, then-Vice Chairman Chung Eui-sun shared Hyundai’s vision for the future at a town hall meeting, stating, “The future of Hyundai will be 50% automobiles, 30% personal aircraft, and 20% robotics,” thus outlining Hyundai’s commitment to urban air mobility.
Many UAM startups are backed by automotive companies, recognizing that next-generation mobility could be a high-value sector for showcasing technological prowess and providing integrated mobility services linked to ground transportation.
‘Joby Aviation’ and ‘Archer Aviation,’ for instance, have received $500 million (approximately KRW 692.8 billion) and $165 million (approximately KRW 228.6 billion) in investments from ‘Toyota’ and ‘Stellantis,’ respectively.
In comparison, ‘Supernal’ holds a financial advantage. As a Hyundai-owned and funded entity, ‘Supernal’ has more straightforward access to the capital needed for production and regulatory approvals than competitors who rely on partnerships.
Hyundai, Kia, and Hyundai Mobis have collectively invested $920 million (approximately KRW 1.2747 trillion) in ‘Supernal,’ surpassing competitor funding levels.
With regulatory advancements in the U.S. opening a path to commercialization, ‘Supernal’ is expected to leverage synergies with Hyundai Motor Group as it seeks to establish itself as a prominent player in next-generation mobility.
‘TechRadar’ commented, “Companies like ‘Joby Aviation’ and Hyundai-owned ‘Supernal’ appear to be readying to launch air taxis in the near future.”
#HyundaiMotorGroup #Supernal #UrbanAirMobility #UAM #eVTOL #AirTaxi #ChungEuiSun #NextGenMobility #FAA #Aerospace
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- KB Financial Group Stock Hits KRW 100,000: Yang Jong-hee Leads Growth
- Yang Jong-hee, Chairman of KB Financial Group, is cementing the company's position as a leader in both performance and value growth this year. His leadership, now in its second year, is receiving increased momentum.
On October 25, KB Financial Group’s stock closed at KRW 100,900, up 8.26% from the previous day. This marked the highest price since the group was listed in October 2008 and ushered in a new era where a domestic bank stock surpassed the KRW 100,000 threshold for the first time among the four largest financial groups in Korea.
KB Financial Group's market capitalization now ranks 7th in the KOSPI index, following Samsung Electronics, SK Hynix, LG Energy Solution, Samsung Biologics, Hyundai Motor, and Celltrion.
Yang’s new shareholder return policy and strategies to enhance corporate value, announced the previous day, had an immediate positive impact on the market.
During KB Financial’s third-quarter earnings conference, Yang personally unveiled a policy to return excess capital to shareholders once the Common Equity Tier 1 (CET1) ratio reaches 13%.
This advanced policy aligns the company's profitability and growth with greater shareholder returns.
Yang emphasized, “Like leading global firms such as JPMorgan, our shareholder return policy links capital ratios with returns, ensuring that the higher our capital ratio, the more we return to shareholders, with no cap on the total shareholder return ratio. KB Financial will lead the industry with this policy and maintain the highest shareholder return ratio in the sector.”
The CET1 ratio, a key indicator of a financial company’s ability to absorb losses, reflects KB Financial’s confidence in its financial management and profitability under this policy.
In addition to setting bold targets, Yang introduced innovative methods to enhance value differentiation, earning praise from analysts.
KB Financial’s long-standing leadership in share buybacks and cancellations among the top financial groups heightened market expectations for its new value enhancement strategy.
Yang announced that starting in 2025, KB Financial’s asset growth targets and key performance indicators will be adjusted to align with the new shareholder return policy, underscoring his commitment to sustainable value growth.
Securities firms responded positively, raising their target prices for KB Financial stock.
Hana Securities, in its latest report, noted that KB Financial’s CET1 ratio increased to 13.85% in the third quarter, predicting that the company will achieve a shareholder return ratio of 40.3% this year, making it the first bank to surpass the 40% mark.
The report further projected that under the new policy, KB Financial would achieve a 50% total shareholder return ratio faster than any other bank.
Choi Jung-wook, an analyst at Hana Securities, commented, “By linking the CET1 ratio with shareholder returns, KB Financial has increased predictability. As the capital ratio rises, market expectations for expanded shareholder returns will grow, earning positive evaluations.”
Kim Do-ha, an analyst at Hanwha Investment & Securities, remarked, “Even if KB Financial utilizes all its excess capital for shareholder returns by the year’s end, it is expected to maintain a similar capital ratio through annual profits. This policy offers a relatively sustainable structure.”
The anticipation surrounding KB Financial’s new policy is backed by its record-breaking performance.
The group reported a consolidated net profit of KRW 1.614 trillion (US$1.164 billion) in the third quarter of 2024, marking a 17.4% increase from the same period last year.
This widened the gap with its main competitor, Shinhan Financial Group, which recorded a net profit of KRW 1.2386 trillion (US$892 million), solidifying KB Financial’s position as the leading financial group.
Despite narrowing net interest margins (NIM) due to declining market interest rates, the growth of non-bank subsidiaries has contributed to the group’s performance.
Cumulative net profit for the first three quarters of 2024 reached KRW 4.3953 trillion (US$3.171 billion), setting a new record. At this pace, Yang is likely to lead KB Financial to become the first financial holding company to achieve an annual net profit of KRW 5 trillion (US$3.606 billion) by the end of the year.
Yang, who officially took office as the 7th chairman of KB Financial Group in November 2023, is in his first full year in the role.
Since his appointment, he has achieved notable results in increasing non-bank subsidiary profits and supporting share price growth in line with the government’s value-enhancement policies.
However, he still faces challenges, such as normalizing the performance of KB’s overseas operations, including KB Bukopin Bank in Indonesia, addressing reduced profitability during periods of interest rate cuts, and improving internal controls.
In his latest announcement, Yang reiterated his commitment to corporate value growth, stating, “We will focus all our efforts on sustainable management that balances profitability, stability, and shareholder value. Beyond quantitative growth, we aim to achieve qualitative improvements by reshaping KB Financial's operations and leading the industry in shareholder returns.”
#KBFinancialGroup #YangJonghee #banking #shareholderreturns #CET1ratio #financialleadership #Koreanbankstocks #valueenhancement #nonbanksubsidiaries #marketcapitalization
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- Hyundai Targets India's Rapidly Growing, EV Market with Localized Models
- As India’s electric vehicle (EV) market expands rapidly, Hyundai Motor is aiming to capture market share with thoroughly localized models.
According to industry sources on October 25, Hyundai plans to launch a total of four EV models in India, starting with the locally-produced 'Creta EV' in January 2024.
This move is part of the company’s strategy to establish dominance in India's accelerating EV transition.
India emerged as the world’s third-largest automotive market in 2022, with 5,186,624 vehicles sold, following China and the United States, according to the Society of Indian Automobile Manufacturers (SIAM).
The Indian government is also driving aggressive electrification policies to promote the transition to EVs.
Though India's overall EV sales remain relatively low, the market is growing at an exponential pace. The Korea International Trade Association (KITA) reported that EV sales in India increased from just 5,000 units in 2020 to 15,000 in 2021, 48,000 in 2022, and 90,000 in 2023.
Market research firm Fortune Business Insights predicts that the Indian EV market will grow at an average annual rate of 22.4%, reaching $117.78 billion (approximately KRW 163.4 trillion) by 2032.
Hyundai’s CEO Chang Jae-hoon, speaking on the company’s IPO on October 22, stated, “Although the Indian EV market is still small, it will eventually grow to a global scale, and we aim to expand our market share.”
In addition to the officially announced 'Creta EV', Indian automotive media outlet *Autocar India* reported that Hyundai will launch three more locally-customized EVs: the 'Ioniqster EV', 'Grand i10 NIOS EV', and 'Venue EV'.
Among the four models, the 'Ioniqster EV' will hold the position of the “most affordable EV,” while the remaining models will be customized to suit Indian consumers’ preferences as strategic models.
Localized models are developed to reflect the unique characteristics of each market or region, considering environmental factors such as terrain, climate, and infrastructure, as well as cultural aspects like family structure, mobility patterns, purchasing power, and road conditions.
The 'Creta EV' is based on the existing 'Creta' compact SUV, which was developed specifically for the Indian market. It features a spacious rear seat to accommodate large families, increased ground clearance for poor road conditions, and an in-cabin air purifier.
Thanks to these features, the Creta became a hit after its July 2015 launch, topping monthly SUV sales in India for three consecutive months. It sold 40,888 units in its first year and was named 'India's Car of the Year (ICOTY)' in 2016.
Hyundai's strategic compact car 'i10' was also developed for the Indian and Southeast Asian markets. After entering the Indian market through its Chennai plant in 1998, Hyundai initially focused on the compact 'Santro', a variant of the Atos.
The Santro was the company's first India-specific model and became known as the "people’s compact car," helping Hyundai secure second place in market share.
The i10, which replaced the Santro in 2007, also gained popularity and was named 'India’s Car of the Year' in 2008. Produced at Hyundai's Indian factory, the i10 remains a popular model alongside the Creta and Venue.
The latest generation of the i10, introduced in 2019, is sold in India as the 'Grand i10 NIOS', and its sedan variant, 'Aura', is also well-received.
According to Hyundai Motor India Ltd. (HMIL), cumulative sales of the Grand i10 NIOS in India recently surpassed 400,000 units, maintaining an average of 80,000 units sold annually since its 2019 launch.
The Venue, a global entry SUV targeting millennials, was first unveiled at the New York International Auto Show in April 2019. Its specifications vary slightly by region, but the model found particular success in India, where smaller SUVs are preferred due to narrow roads.
While the Venue struggles with low sales in South Korea, selling fewer than 10,000 units annually, it has been a major hit in India, selling over 300,079 units in three years.
Priced between KRW 12 million and 20 million (approximately USD 9,000 to 15,000), the Indian version of the Venue offers fewer options and reduced performance to align with local preferences.
Hyundai is also expanding its electric infrastructure, with plans to increase the number of EV charging stations in India to 485 by 2030.
Additionally, Hyundai and Kia are partnering with India’s Exide Energy to integrate locally-produced batteries into their dedicated EV models.
A Hyundai representative stated, “With the launch of the Creta EV, we are accelerating our efforts to establish a strong foothold in India’s EV market.”
#Hyundai #CretaEV #IndiaEVmarket #electricvehicles #localizationstrategy #automotiveindustry #Venue #i10 #Grandi10NIOS #marketexpansion #HyundaiIndia
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- Shinhan Financial Overcomes Investment Losses, Strengthens Internal Controls under Jin Ok-dong
- Shinhan Financial Group reported solid earnings for the third quarter, supported by strong performances from its core subsidiaries despite an investment loss of KRW 130 billion (USD 93.7 million) from Shinhan Investment & Securities.
The group managed to increase net profits year-over-year, underscoring resilience in the face of setbacks.
On October 25, Shinhan Financial announced that its consolidated net profit attributable to shareholders was KRW 1.2386 trillion (USD 893 million) for the third quarter.
Though this marked a 13.1% decrease from the record-breaking second quarter profit of KRW 1.4255 trillion (USD 1.03 billion), it represented a 3.9% increase compared to the same period last year.
Shinhan Financial attributed the decline in net profit from the second quarter to one-off losses, emphasizing that it still achieved stable performance through interest income growth and effective cost management.
The group’s interest income for the third quarter rose by 3.3% year-over-year to KRW 2.855 trillion (USD 2.06 billion), while non-interest income declined by 9.4% to KRW 827.8 billion (USD 596.8 million).
Key subsidiaries, including Shinhan Bank, Shinhan Card, and Shinhan Life, delivered strong results, with cumulative net profits for the first three quarters increasing by 19.4%, 17.8%, and 9.2%, respectively. These performances provided a solid foundation for the group’s overall results.
However, Shinhan Investment & Securities reported a net loss for the third quarter due to the KRW 130 billion (USD 93.7 million) investment loss. The company’s liquidity provision team incurred significant losses in early August from Kospi 200 futures trading, impacting its securities and foreign exchange derivative portfolio.
Financial Services Commission Chairman Kim Byung-hwan instructed the Financial Supervisory Service to conduct a thorough investigation, further intensifying the fallout.
Following the incident, Shinhan Investment & Securities formed an emergency response team led by CEO Kim Sang-tae and dismissed several executives involved.
In a letter to shareholders on October 17, Shinhan Financial Chairman Jin Ok-dong stated, “We held an emergency meeting with the group’s CEOs over the weekend. We will share our response plan with shareholders as soon as it is ready.”
This incident comes as Shinhan Financial prepares for year-end leadership appointments, with many anticipating that the performance will influence Jin’s decisions for key roles in his second term.
Jin, who retained all subsidiary CEOs last year under the principle of “not changing generals during a war,” faces heightened expectations this year as he selects key leaders to serve alongside him in the latter part of his tenure.
Twelve CEOs of Shinhan’s subsidiaries, including Shinhan Bank, Shinhan Card, and Shinhan Life, are set to complete their terms by the end of this year or early next year.
The group’s CEO Nomination Committee held its first meeting on September 10 to begin the succession process.
Jin is reinforcing his focus on internal controls, aligning with his commitment to ethical management. On October 22, he addressed a Consumer Protection Conference attended by 10 CEOs and 150 staff members responsible for consumer protection. He urged, “I hope all employees will continue to reflect on themselves and identify areas where they have grown complacent.”
Jin has prioritized internal controls since becoming chairman in 2022, particularly in the wake of financial scandals such as the KRW 70 billion (USD 50.5 million) embezzlement case at Woori Bank and the Lime Asset Management fund crisis during his tenure as Shinhan Bank’s president.
Under Jin’s leadership, Shinhan Financial has taken proactive measures to enhance internal controls.
In July 2022, Jin became the first among major financial holding company chairmen to introduce an early accountability framework.
By September 2023, Shinhan Bank became the first financial institution to submit the results of its internal control review to the authorities.
The group reaffirmed its commitment to internal controls during the third-quarter earnings call.
At the conference call, Shin Sang-young, Vice President of Finance at Shinhan Financial, stated, “We will revisit our internal control systems from the ground up, reaffirming that customer trust and strong internal governance are the essence of our business. We are committed to ensuring that this incident does not affect the value enhancement plans we have shared with stakeholders.”
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- Samsung Biologics Eyes Investment in 6th Plant, John Rim Strengthens Performance and Financial Stability
- John Rim, CEO of Samsung Biologics, is expected to accelerate efforts to expand production capacity as part of his strategy to enhance the company’s competitiveness in the contract development and manufacturing organization (CDMO) market.
Rim has emphasized that increasing production capacity is essential to securing orders. Although the company already has long-term investment plans, the pace of expansion may not match the surge in orders.
With favorable developments such as the U.S. push for a biosecurity law restricting trade with certain Chinese bio-companies, Samsung Biologics may actively advance its timeline for building new production facilities.
According to industry sources on October 24, Samsung Biologics may begin construction of its 6th plant earlier than initially expected.
While the 5th plant is scheduled to commence operations in April 2025, demand is increasing so rapidly that additional capacity may be required sooner.
Initially, construction of the 6th plant was projected to begin in 2025, but with Samsung Biologics securing significant new orders, the timeline could be accelerated.
In July, the company announced a KRW 1.5 trillion (US$ 1.08 billion) contract, followed by a record-breaking KRW 1.7 trillion (US$ 1.22 billion) deal with a Japanese company on October 21, set to run until 2037.
Kiwoom Securities analyst Heo Hye-min remarked, “The recent KRW 1.7 trillion contract is likely linked to the 5th plant, but with orders coming in steadily, construction of the 6th plant could begin within this year.”
Samsung Biologics stands to benefit from geopolitical developments as the U.S. government moves toward legislation restricting transactions with certain Chinese bio-companies.
The shift could create new opportunities for Samsung Biologics to capture market share, particularly from WuXi Biologics, which currently holds 12.1% of the global CDMO market.
Rim has previously highlighted the need for proactive investment to stay ahead in the market, and he seems poised to seize this opportunity.
Samsung Biologics is also in a strong financial position to fund new investments. For the first time in its history, the company’s cumulative sales for the first three quarters of 2024 surpassed KRW 3 trillion (US$ 2.16 billion).
The company raised its annual sales growth target from 10–15% to 15–20% and expects to exceed KRW 4 trillion (US$ 2.88 billion) in annual revenue, becoming the first domestic pharma-biotech company to achieve this milestone.
When Rim assumed the CEO position in December 2020, Samsung Biologics' revenue stood at KRW 1 trillion. In just four years, that figure is on track to quadruple.
The strong third-quarter performance was driven by the full utilization of Plants 1 to 3 and the rapid ramp-up of Plant 4.
Plant 4 secured orders early, enabling swift production scaling. Similarly, Plant 5 is expected to contribute to profit growth soon after it becomes operational in 2025.
Samsung Biologics' financial health is solid, with a debt ratio of 51%, allowing ample room for large-scale investments.
In October 2022, the company announced plans to invest KRW 7.5 trillion (US$ 5.4 billion) by 2032 to build Plants 5 through 8 at its Songdo 2 campus in Incheon. However, detailed plans for the 6th plant have not yet been disclosed.
A Samsung Biologics representative stated, “The decision to break ground on the 6th plant will be disclosed after board approval. The new plant will have a production capacity similar to that of Plant 5, and the timeline from construction to production will also be comparable.”
#SamsungBiologics #JohnRim #CDMO #6thPlant #ProductionExpansion #Biotech #FinancialPerformance #Songdo #WuXiBiologics #KoreaBusiness #GlobalExpansion