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- Nongshim Reconsiders ‘U.S. Third Plant’ as Shin Dong-won Weighs Response to ‘Trump Tariffs’
- Shin Dong-won, chairman of Nongshim, is facing growing concerns over the "Trump tariff risk."
Last year, Chairman Shin was considering building a third factory in the United States to meet the increasing demand for ramen in the local market. However, he shifted his strategy to constructing an export-only factory in Busan. This change came as former U.S. President Donald Trump announced plans to impose tariff barriers on countries worldwide, making the need for expanding manufacturing facilities in the U.S. more pressing.
According to the food industry on April 4, there are speculations that Nongshim may reconsider building a new plant in the U.S. to mitigate the risks of tariffs imposed by the U.S. government.
To address the tariff-related risks, which are a top priority of Trump's second-term policies, having additional factories in the U.S. could be a more effective solution. The Trump administration has already signaled a global tariff war. On April 1, Trump signed an executive order imposing tariffs of 25% on Canada and Mexico and 10% on China, which took effect on April 4.
Although he abruptly delayed the tariffs on Canada and Mexico for a month just before implementation, many analysts believe that the risk remains, given Trump's negotiating style.
Considering Trump’s strong "deal-maker" approach, experts point out that he could use tariffs as a leverage tool whenever he believes the U.S. is not benefiting enough.
South Korea is not exempt from this risk. Since Trump's campaign days, when he pledged to apply a universal minimum tariff of 10% on all countries, South Korea’s major export companies have been closely monitoring the potential impact of his administration.
The repercussions are already being felt. On April 3, the stock prices of major domestic food companies declined across the board as concerns grew that the U.S. government could impose successive tariff barriers on various countries, potentially impacting South Korean food exporters.
For Chairman Shin, the tariff risk is an unavoidable burden. Nongshim currently operates two factories in the U.S., but the production capacity of these plants alone is insufficient to meet local consumer demand.
A Nongshim official stated, "If we build another plant in the U.S., we expect that local sales will increase in line with the expanded production capacity. The first and second plants are already running at full capacity, and a new factory would allow us to better meet demand."
Chairman Shin had hinted at this need during Nongshim’s annual general shareholders’ meeting in March 2023, saying, "We are considering constructing a third plant in the U.S., with the East Coast being a strong candidate."
However, his final decision was to expand in South Korea rather than in the U.S. In June of last year, Nongshim put its U.S. third-plant plan on hold and instead opted to build an export-dedicated factory at the Noksan plant in Busan to meet the rising overseas demand.
Nongshim explained that, after evaluating the business feasibility of an additional U.S. factory, the costs of acquiring land, purchasing equipment, and labor were too high, making it an unfavorable time for investment.
Nongshim is currently investing KRW 191.8 billion (US$ 138.3 million) in the construction of the Busan export-only factory. Groundbreaking is expected to begin soon, with the goal of completing the investment by the end of April 2026 and starting operations in the second half of next year.
This marks the first time in 17 years that Nongshim has built a ramen factory in South Korea. Once completed, the company’s annual production of export ramen will double from the current 500 million units to 1 billion units.
However, with Trump's second administration now a reality, some argue that it is time for Nongshim to reassess its strategy. If the tariff risk materializes, building a new factory in the U.S. could be a long-term advantage for the company. A year ago, Trump's re-election was uncertain, but now that his second term is underway, a reassessment of the situation is necessary.
Nongshim’s overseas sales ratio was around 34% in 2020, but it increased to 37% in 2021, 39% in 2022, and remained at 39% in 2023. An estimated 40% of the company's total operating profit also comes from overseas markets.
Sales in the U.S. are growing rapidly. Last year, the Financial Times, citing market research firm Euromonitor International, reported that Nongshim’s largest overseas market is the United States, where the company holds a 25.4% market share. Nongshim ranks second in the U.S. market, following Japan’s Toyo Suisan, which dominates with about 50% market share.
In July 2023, Chairman Shin sent an email to employees expressing his ambition to expand in the U.S. market, stating, "By 2023, we aim to triple our annual revenue in the U.S. and become the number one ramen brand."
Chairman Shin’s decision to continue the leadership of CEO Lee Byung-hak, a production expert, is also seen as reflecting concerns about securing production bases.
CEO Lee is widely recognized as an expert in production management within and outside of Nongshim. Since joining the company in 1985 as part of the quality development team, he has held key positions such as production manager at the Anyang and Gumi plants, production technology team leader at Anyang, and factory manager at both Gumi and Anyang. Before becoming CEO, he served as the head of production.
Given that CEO Lee has overseen Nongshim’s largest production facilities—the Gumi and Anyang plants—and eventually took charge of production for all Nongshim factories, his expertise is unquestionable.
CEO Lee played a key role in implementing a smart factory system at the Gumi plant, making Nongshim the first ramen company in South Korea to do so. He was responsible for enabling the factory to produce 600 packs of ramen per minute.
Considering that Nongshim must carefully deliberate its production base strategy, it is likely that Chairman Shin will continue to rely on CEO Lee’s expertise for the time being. In fact, Lee retained his position in last year’s executive reshuffle, suggesting that he may have his term extended at the upcoming general shareholders' meeting in March.
A Nongshim official stated, "The plan to build a new factory in the U.S. is currently on hold," adding, "It is difficult to confirm whether the management is reassessing the construction of a U.S. plant in response to the tariff risk."
#ShinDongWon #Nongshim #TrumpTariffs #USFactory #RamenMarket #FoodIndustry #GlobalExpansion #ExportStrategy #ProductionManagement #KoreanBusiness
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- Chung Shin-a Unveils Kakao’s AI Blueprint, Partners with OpenAI for Joint Products
- “This is a great moment to share the news of Kakao’s strategic partnership with OpenAI. This collaboration signifies that Kakao has secured the most advanced technological environment in South Korea.”
Chung Shin-a, CEO of Kakao, made this statement at a joint press conference on April 4 at The Plaza Hotel in Jung-gu, Seoul, announcing the strategic partnership with OpenAI. This marks the first time a South Korean company has entered into a strategic alliance with OpenAI.
The partnership was formed as a result of mutual strategic interests—Kakao's goal of optimizing AI models for its services aligned with OpenAI’s aim of expanding its global ecosystem. After continuous discussions since September of last year, the two companies decided to move forward with the collaboration.
CEO Chung stated, “Kakao has already established a strong business ecosystem in South Korea, but in the AI era, what we need is a technological ecosystem. While other companies focus on enhancing model performance, we have been considering how to secure the best AI models tailored for our services and how to use them to provide optimal AI-driven services.”
Since Chung took the helm at Kakao in March last year, the company has shifted its strategy from focusing on in-house large language model (LLM) development to leveraging its strengths to provide AI services. In October of last year, Kakao introduced its "AI Orchestration" strategy, which actively incorporates external AI models. This collaboration with OpenAI is expected to reinforce that direction.
Chung further explained, “OpenAI is the best partner for Kakao, as it enables us to integrate AI technology optimized for our services and development speed, leveraging Kakao’s long-standing service expertise.”
Sam Altman, CEO of OpenAI and the creator of ChatGPT, made a surprise appearance at the event.
Wearing yellow socks—the signature color of Kakao—Altman said, “I have always liked Kakao,” adding, “We share the same AI vision.”
Through this partnership, Kakao will integrate OpenAI’s technology into its key services, including KakaoTalk and Kanana. The two companies also plan to co-develop new products.
However, specific details regarding joint products were not disclosed at the event. It was revealed that the two companies are still in the brainstorming phase, exploring ideas in response to high-demand user needs.
This partnership does not involve equity acquisition or the establishment of a joint venture. Instead, both companies plan to expand their collaboration gradually over the long term.
Chung emphasized, “There are many types of collaboration, but we are focusing on co-developing products. We are investing not only financial capital but also personnel, with teams from both OpenAI and Kakao working together.”
Kakao has previously been perceived as lacking a clear competitive edge in AI compared to domestic rivals, with an unclear direction in its AI business strategy. Through this collaboration, Kakao aims to launch various AI services and enhance its competitiveness in the field.
The first AI service to be released under this initiative will be "Kanana," which CEO Chung introduced at a developer conference in October last year. After undergoing a closed beta test (CBT), it is set for official launch later this year. Kakao also plans to introduce additional AI-powered services in collaboration with OpenAI.
Chung stated, “We are targeting the Kanana launch for this year, but we want to ensure it meets a high standard, so there are still many areas to refine. This year, we plan to develop multiple AI services that seamlessly integrate into users’ daily lives and accelerate development speed, positioning this as a period of transformation.”
The partnership has also drawn attention as it comes amid increasing competition in the AI industry. With Chinese startups, such as DeepSeek, intensifying their challenge against established players like OpenAI, this alliance is seen as a strategic move by OpenAI to expand its ecosystem through collaboration with a major South Korean company.
Altman remarked, “OpenAI’s goal is to deliver the benefits of AI to everyone. To achieve this, we need not only advanced model research but also excellent products,” expressing optimism about co-developing various products with Kakao.
#Kakao #OpenAI #AIPartnership #AIOrchestration #ArtificialIntelligence #SamAltman #KakaoTalk #TechInnovation #KoreaAI #AIIntegration
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- Woori Financial Group Braces for FSS Inspection, Yim Jong-ryong’s Expansion at Risk
- With the Financial Supervisory Service (FSS) set to release its inspection results for financial holding companies and banks, tension is rising at Woori Financial Group. The FSS has already signaled a “strict approach.”
As Woori Financial Group chairman Yim Jong-ryong has placed a major bet on acquiring an insurance company to complete the group's non-banking portfolio, the FSS report is expected to be a key indicator of whether the acquisition will receive regulatory approval.
According to the financial industry on January 3, the FSS will announce the *2024 Inspection Results for Major Financial Holding Companies and Banks* on January 4.
This announcement will cover not only Woori Financial Group but also KB Financial Group and NH Financial Group.
As the announcement approaches, attention is increasingly focused on Woori Financial Group, which is at a critical juncture in its bid to transform into a comprehensive financial group encompassing banking, securities, and insurance.
In August 2023, Woori Financial Group signed acquisition agreements for Tongyang Life and ABL Life and submitted an acquisition approval application to the Financial Services Commission (FSC) in January 2024.
The acquisition of Tongyang Life and ABL Life is seen as Yim’s key strategy to strengthen Woori Financial’s non-banking sector.
Woori Financial is the only one among South Korea’s four major financial holding companies without an insurance subsidiary. Having secured a securities portfolio with the acquisition of Korea Post Securities in May 2024, Woori now aims to complete its non-banking structure by adding an insurance business.
However, industry observers caution that the acquisition could be jeopardized depending on the FSS inspection results.
According to the Financial Holding Company Supervision Regulations, financial holding companies must maintain a minimum *Management Status Evaluation* grade of 2 or higher to acquire a new financial subsidiary.
Although the FSS is not expected to release the overall evaluation grade in this report, if Woori Financial later receives a grade of 3, it could face difficulties in proceeding with the acquisition of Tongyang Life and ABL Life.
The concern is that Woori Financial’s inspection results are unlikely to be lenient.
The FSS’s regular inspection of Woori Financial and Woori Bank was initially scheduled for December 2023. However, as the domestic political landscape shifted into impeachment proceedings, the announcement was postponed twice—first to January 2025 and then to February.
FSS Governor Lee Bok-hyun stated in December 2023, regarding the delay, "The intention is to present the findings in a firm and strict manner to the public and the market, in line with principles," adding, "If the goal had been to downplay the issue, we would have released the report this month in a softer manner."
Meanwhile, the core issue in Woori Financial’s inspection—the alleged improper loans involving former chairman Sohn Tae-seung’s relatives—has grown in scale, reaching KRW 50 billion (USD 36.1 million).
On January 24, Woori Financial revised its disclosure, adjusting the embezzlement amount related to improper loans to KRW 51.7 billion (USD 37.3 million).
The original figure was reported as KRW 35 billion (USD 25.2 million), but additional illegal loans exceeding KRW 10 billion (USD 7.2 million) were uncovered during the prosecution’s investigation.
Even if Woori Financial receives a grade of 3 in the Management Status Evaluation, it could still seek FSC approval as a final option.
The FSC has the discretion to approve subsidiary acquisitions in exceptional cases if the acquiring financial institution demonstrates the ability to improve its rating to grade 2 or higher through capital increases and asset restructuring.
However, depending on the FSS inspection’s overall tone, not only the insurance acquisition but also Yim’s broader non-banking expansion strategy could face hurdles.
The results of the FSS review could also impact the approval process for Woori Investment & Securities' investment brokerage license.
Without an investment brokerage license, Woori Investment & Securities would be unable to engage in corporate finance (IB) activities such as initial public offerings (IPOs) and derivatives trading, limiting its ability to contribute to the group’s overall earnings.
In his New Year's address, Yim stated, "We cannot remain at the edge of a cliff, standing still," adding, "Rebuilding Woori Financial’s reputation on a solid foundation of trust is a task we must accomplish."
He further emphasized, "We will secure a strong foundation for growth and elevate our status as a comprehensive financial group."
#WooriFinancialGroup #YimJongRyong #FinancialSupervision #BankingIndustry #InsuranceAcquisition #FinancialRegulation #FSSInspection #CorporateFinance #InvestmentStrategy #KoreanFinance
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- Lee Jae-yong Freed from Legal Risks, Eyes Return as Registered Director and Major Investments
- Lee Jae-yong, chairman of Samsung Electronics, has been acquitted in the appellate trial for the ‘Cheil Industries-Samsung C&T Merger Case,’ effectively freeing him from legal risks.
With his legal uncertainties cleared, Lee is expected to actively tackle the "Samsung Electronics crisis" by considering his return as a registered director and pursuing large-scale investments and mergers and acquisitions (M&A).
On January 3, the Seoul High Court's Criminal Division 13 (Presiding Judges Baek Kang-jin, Kim Sun-hee, and Lee In-soo) delivered a not-guilty verdict in Lee’s second trial related to the alleged unlawful merger and accounting fraud tied to his management succession.
Lee had been accused of orchestrating illicit transactions and accounting fraud during the 2015 merger of Cheil Industries and Samsung C&T to secure management control at minimal cost and strengthen his grip over the group.
However, the appellate court ruled, "It is difficult to accept the prosecution’s claim that the timing of the Cheil Industries-Samsung C&T merger was arbitrarily chosen, or that stock price manipulation and illegal transactions occurred during the stock purchase request period," adding, "It is also hard to conclude that the Samsung C&T-Cheil Industries merger report was falsified."
Regarding the allegations of accounting fraud, the court stated, "It is difficult to see the accounting treatment of Samsung Biologics and Samsung Bioepis as fraudulent."
The court also maintained the first trial’s ruling that the evidence obtained by prosecutors through seizures lacked admissibility.
"The fact that the defense did not explicitly object does not make the procedure lawful. The prosecution must prove there was active consent, but such proof was not provided," the court ruled.
All 13 co-defendants, including Choi Ji-sung, former head of Samsung Group’s Future Strategy Office, Kim Jong-jung, former strategy team leader, and Jang Choong-ki, former deputy chief of the office, were also acquitted as in the first trial.
Although prosecutors still have the option to appeal to the Supreme Court, appellate court rulings are typically final unless there is a significant legal misinterpretation. Therefore, Lee has effectively put behind the legal risks that have persisted since the July 2015 Samsung C&T-Cheil Industries merger.
Lee’s acquittal is expected to accelerate his return as a registered director at Samsung Electronics.
Since completing his term as an inside director in October 2019, Lee has remained an unregistered executive. However, amid Samsung Electronics’ ongoing crisis, there is growing internal and external pressure for his return to a registered director role to reinforce responsible management.
Among the heads of South Korea’s four largest conglomerates—Samsung, SK, Hyundai Motor, and LG—Lee is the only one serving as an unregistered executive.
There is speculation that a proposal to reinstate Lee as a registered director may be presented at the Samsung Electronics shareholders’ meeting as early as March 2024.
Analysts also predict that Lee will accelerate large-scale investments that had been delayed.
Although he was officially appointed chairman of Samsung Electronics on October 28, 2022, Lee had been relatively inactive in future-oriented investment activities due to legal risks.
Since acquiring the automotive component company Harman in 2016, Samsung Electronics has not executed any major M&A deals, which has made securing new business opportunities more challenging.
Additionally, Samsung Electronics has struggled to maintain its dominance in the memory semiconductor sector, fueling concerns about the company's future.
Given these factors, Lee is expected to consider acquisitions in artificial intelligence (AI), robotics, medtech (medical technology), HVAC systems, and semiconductor-related fields to strengthen Samsung Electronics’ competitive edge.
#Samsung #LeeJaeYong #SamsungElectronics #MergerCase #LegalVictory #InvestmentStrategy #CorporateLeadership #Semiconductor #AI #MergersAndAcquisitions
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- Chung Ji-sun Speeds Up Holding Company Transition, Strengthens Shareholder Trust
- Hyundai Department Store Group is in the final stages of transitioning to a holding company structure while accelerating efforts to secure funds for dividend expansion.
As part of its corporate value enhancement plan announced last year, Hyundai Department Store Group has set a goal to increase the annual dividend of its holding company, Hyundai GF Holdings, to KRW 50 billion (USD 36.1 million) by 2027 and raise its shareholder return ratio to over 80%.
Additionally, the group has introduced a separate semi-annual dividend of over KRW 10 billion (USD 7.2 million), further strengthening its shareholder return policy.
While some have questioned the feasibility of this plan, expectations for securing dividend resources have grown due to improving performance among key subsidiaries and continued equity purchases. As a result, confidence in dividend expansion is increasing, leading to a recovery in shareholder trust.
According to the retail industry on January 3, Hyundai Department Store Group’s transition to a holding company structure is in its final stages.
To meet the regulatory requirements for holding companies, Hyundai GF Holdings has announced plans to acquire stakes in Daewon Kangup and Hyundai Futurenet from its affiliates.
Hyundai GF Holdings will purchase a 10.1% stake in Daewon Kangup from Hyundai Home Shopping and Hyundai Department Store at KRW 4,620 (USD 3.33) per share, totaling KRW 28.8 billion (USD 20.8 million). This transaction will increase Hyundai GF Holdings’ stake in Daewon Kangup from 22.7% to 32.8%.
Under the Fair Trade Act, holding companies must own at least 30% of listed subsidiaries within two years of establishment. Since Hyundai GF Holdings has now been a holding company for one year, its recent equity purchases are seen as an effort to finalize its transition.
Additionally, Hyundai Home Shopping has decided to acquire a 28.5% stake in Hyundai Futurenet from Hyundai GF Holdings and Hyundai Department Store. The transaction is valued at KRW 4,290 (USD 3.09) per share, amounting to KRW 135 billion (USD 97.3 million).
Hyundai Futurenet is a subsidiary of Hyundai GF Holdings, but it does not meet the Fair Trade Act’s requirement that subsidiaries be wholly owned. This equity restructuring aims to resolve the regulatory issue.
As of 2023, Hyundai GF Holdings' total dividend payout was approximately KRW 31.2 billion (USD 22.5 million), with KRW 6.2 billion (USD 4.5 million) allocated to minority shareholders, excluding the owner family.
Considering Hyundai GF Holdings' plan to introduce a semi-annual dividend of over KRW 10 billion (USD 7.2 million) and expand its annual dividend to KRW 50 billion (USD 36.1 million) by 2027, the total dividend is projected to rise to KRW 11.9 billion (USD 8.6 million), reflecting an increase of over 90% compared to 2023.
One of the key factors boosting investor confidence in the dividend policy is the improving performance of Hyundai GF Holdings' subsidiaries. In the third quarter of 2023, Hyundai GF Holdings recorded consolidated revenue of KRW 2.0114 trillion (USD 1.45 billion) and an operating profit of KRW 66.6 billion (USD 48 million), marking a year-on-year increase of 295.1% in revenue and 1,215.3% in operating profit.
Hyundai Green Food significantly outperformed market expectations due to an increase in group catering contracts and strong performance in the restaurant business, while Hyundai Livart also achieved higher-than-expected results.
Industry experts anticipate that Hyundai Futurenet's full integration into Hyundai Home Shopping will further enhance financial performance. Hyundai Futurenet’s media, advertising, and IT infrastructure businesses are expected to create synergies with home shopping, and structural changes will strengthen collaboration between the two companies.
Moreover, vertical integration between home shopping and digital advertising/media businesses is expected to improve operational efficiency while enhancing data-driven marketing and content production capabilities.
Nam Seong-hyun, an analyst at IBK Investment & Securities, stated, "The financial performance of key subsidiaries is improving, and Hyundai Green Food, a core business unit, is continuing its growth. Given these trends, Hyundai GF Holdings is likely to maintain its improving earnings trajectory."
He added, "As Hyundai GF Holdings expands its control over subsidiaries, its dividend resources will increase, further strengthening investor confidence in the company’s long-term dividend policy."
Currently, Hyundai GF Holdings owns Hyundai Home Shopping, Hyundai Green Food, Hyundai Livart, Hyundai Everdigm, Hyundai Department Store, Hyundai EZwell, and Daewon Kangup. Hansum is under Hyundai Home Shopping and is thus classified as a sub-subsidiary of Hyundai GF Holdings.
#HyundaiDepartmentStore #HyundaiGFHoldings #CorporateRestructuring #HoldingCompany #DividendExpansion #RetailIndustry #InvestmentStrategy #ShareholderReturns #HyundaiGreenFood #HomeShoppingBusiness
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- Korea Investment Management’s ‘Bae Jae-kyu Magic’ Works, ETF Market’s Big 3 Structure Set for a Shake-up
- Bae Jae-kyu, CEO & President of Korea Investment Management, is on the verge of breaking into the top three in Korea’s exchange-traded fund (ETF) market.
In just three years since taking office, Bae has increased Korea Investment Management’s ETF net assets by more than KRW 10 trillion (US$ 7.2 billion), engaging in a fierce battle for market share with KB Asset Management. If Korea Investment Management continues its growth trajectory in the ETF market this year and solidifies its position in third place, it will mark the first change in the "Big 3" rankings in ten years, a structure that has remained unchanged since 2015.
According to the Korea Financial Investment Association’s statistics on the 31st, as of the 24th, Korea Investment Management's total ETF net assets stood at KRW 14.09 trillion (US$ 10.2 billion), closely trailing KB Asset Management’s KRW 14.35 trillion (US$ 10.3 billion).
In terms of market share, KB Asset Management holds 7.80%, while Korea Investment Management follows closely at 7.66%, with only a few hundred billion won differentiating their rankings. From January 21 to 23, Korea Investment Management briefly surpassed KB Asset Management in ETF net assets, reclaiming the industry’s third spot. This close competition has continued since Korea Investment Management first overtook KB Asset Management on December 27, 2023.
At the end of 2021, before Bae took office, Korea Investment Management's ETF net assets were KRW 3.42 trillion (US$ 2.5 billion), with a market share of 4.63%. At the time, the gap with KB Asset Management (KRW 5.84 trillion or US$ 4.2 billion, 7.90% market share) was 2.27 percentage points.
However, after Bae became CEO, the company's ETF net assets surpassed KRW 5 trillion (US$ 3.6 billion) in July 2023, exceeded KRW 10 trillion (US$ 7.2 billion) in June 2024, and have now reached KRW 14 trillion (US$ 10.1 billion). This is a remarkable achievement considering that Samsung Asset Management and Mirae Asset Global Investments dominate about 75% of the Korean ETF market, making it difficult for competitors to expand their market share.
Since 2015, the top three in Korea’s ETF market have been Samsung Asset Management, Mirae Asset Global Investments, and KB Asset Management. If Korea Investment Management surpasses KB Asset Management this year, it will disrupt a decade-long ranking system in the industry.
For the past three years, Korea Investment Management has already ranked third in personal net purchases in the ETF market, trailing only Mirae Asset’s "TIGER ETF" (KRW 12.9 trillion or US$ 9.3 billion) and Samsung Asset Management’s "KODEX ETF" (KRW 7.3 trillion or US$ 5.3 billion).
Since Bae became CEO in 2022, Korea Investment Management’s ETF net assets have increased by nearly KRW 10 trillion (US$ 7.2 billion), with personal investors accounting for 40% (KRW 4.1 trillion or US$ 3 billion) of this growth. In 2023 alone, individual investors contributed KRW 2.76 trillion (US$ 2 billion) in inflows to Korea Investment Management’s ETFs. Analysts attribute this success to the rebranding of its ETF line to "ACE" in July 2022, which helped the company gain strong traction in the market.
ETFs are highly favored by retail investors, and their presence in individual retirement pension (IRP) and other retirement accounts has been expanding significantly. This makes individual investor net purchases an important metric for evaluating ETF market competitiveness.
Korea Investment Management also gained attention by offering the most funds among the top 10 ETFs with the highest annual returns in 2024.
The firm’s "ACE U.S. Big Tech TOP7 Plus Leverage (Synthetic)" ETF recorded a 197.1% return last year, ranking first overall. Additionally, the "ACE U.S. Stock Bestseller" (84.0%) and "ACE U.S. Big Tech TOP7 Plus" (82.1%) ranked 8th and 9th, respectively, with three of the company's ETFs making it into the top 10 for annual returns.
Bae has emphasized “investments that make money for customers” as the key strategy for Korea Investment Management’s ETFs. As the firm continues to achieve strong performance, industry experts acknowledge its growing influence.
Every time the firm surpasses a significant milestone—KRW 5 trillion (US$ 3.6 billion), KRW 10 trillion (US$ 7.2 billion), and beyond—Bae has reiterated, “Our goal at Korea Investment Management is to provide products that help customers earn money and deliver outstanding results.”
Korea Investment Management previously ranked third in the ETF market in 2013, overtaking Kiwoom Asset Management. However, two years later, KB Asset Management reclaimed the third spot, pushing Korea Investment Management to fourth place. In 2018, the firm dropped to fifth place, overtaken by Hanwha Asset Management, before rebounding to fourth place in 2019, where it has remained for the past decade.
Nam Yong-soo, Head of ETF Management at Korea Investment Management, stated, “We select stocks and sectors with high long-term growth potential and develop unique indices internally. This strategy has resulted in over 40% of ACE ETF assets coming from newly launched products. In 2024, we will focus on the rising trend of ETFs in the pension market, offering innovative long-term investment solutions to sustain our growth.”
#KoreaInvestmentManagement #BaeJaekyu #ETF #Big3 #Investment #StockMarket #Finance #PersonalInvestment #RetirementFunds #Korea
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- Baemin and Coupang Eats Engage in Fierce Lunar New Year Discount Battle, Intense Competition for Kim Beom-seok
- Kim Beom-seok, CEO of Woowa Brothers, and Bom Kim, Chairman of Coupang Inc. (Coupang’s parent company), have engaged in fierce competition over the delivery app market during the Lunar New Year holiday.
Both platforms anticipated a surge in food delivery demand during the holiday and issued a significant number of discount coupons for customers.
While both companies stated that these promotions were not particularly special, the timing of these campaigns—amid intensifying competition between Baemin (Baedal Minjok) and Coupang Eats—drew significant consumer attention.
According to industry sources and consumer community feedback on the 31st, both Baemin and Coupang Eats launched large-scale discount promotions to attract users during the extended nine-day holiday period.
Baemin has been running the “Lunar New Year Lucky Pouch Coupon Event” from January 27 to February 2, where users can receive random coupons with benefits of up to KRW 18,000 (US$ 13). Community posts showed that users received multiple coupons, including five KRW 2,000 (US$ 1.44) discount coupons and one KRW 4,000 (US$ 2.88) discount coupon, labeled as “Lunar New Year Continuous Discount Coupons.”
Additionally, Baemin Club members—subscribers to Woowa Brothers’ paid membership service—received exclusive discount coupons. These “Lunar New Year Baemin Club Exclusive Coupons” allowed users to receive a KRW 5,000 (US$ 3.60) discount on orders over KRW 5,000 (US$ 3.60), essentially making small orders free.
Coupang Eats also launched its own promotional campaign, targeting customers subscribed to Coupang’s paid membership, WOW Membership. Selected members received a “Secret Coupon” granting a KRW 4,000 (US$ 2.88) discount, applicable to any menu.
This move gained attention in consumer forums, with users noting that Coupang Eats typically does not issue membership-wide discount coupons, making this an unusual and strategic initiative.
Both Baemin and Coupang Eats insisted that their recent coupon distributions were not part of any special promotional strategy but rather aligned with the seasonal increase in delivery demand during holidays. However, market observers believe that the increasing competition between the two platforms played a role in these promotions.
Baemin has long dominated the food delivery market, but Coupang Eats’ rapid growth over the past year has created challenges for the market leader. According to big data platform Mobile Index, as of November 2023, Baemin had 22.43 million monthly active users (MAUs), while Coupang Eats had 9.63 million MAUs, reducing the gap by 43% compared to January 2024.
A review of monthly credit card payment trends further highlights Coupang Eats’ sharp growth. The total amount of card payments made through Coupang Eats in November 2023 reached KRW 587.8 billion (US$ 423.8 million), marking a 118% increase compared to January. In contrast, Baemin’s card payment volume decreased from KRW 1.04 trillion (US$ 750 million) in January to KRW 958.8 billion (US$ 691 million) in November.
Mobile Index reported that Coupang Eats’ market share in the delivery and pickup industry increased by 16.9 percentage points over the past year, steadily closing the gap with Baemin, which had long monopolized the market.
According to app and retail analytics service WiseApp·Retail·Goods, Baemin’s market share fell to 59.2% in June 2023, breaking the 60% threshold for the first time in two years.
Coupang Eats has been closing the gap with Baemin rapidly due to aggressive promotions since last year. Industry experts believe that Woowa Brothers’ recent management changes also reflect its effort to regain lost ground. In January, Woowa Brothers held an extraordinary general meeting and board meeting, appointing Kim Beom-seok, who previously led the top food delivery app in Turkey, as its new CEO.
Kim Beom-seok wasted no time making his ambitions clear. Less than a week after taking office, he stated in an all-hands meeting, “By 2025, I will put Baemin back on a growth trajectory. To achieve this, we must fundamentally change our approach, prioritizing customer value maximization and enhancing customer experience.”
Meanwhile, Bom Kim, Chairman of Coupang Inc., has been tightening his grip on the market through aggressive investments in Coupang Eats, which has overtaken Yogiyo to become the second-largest delivery app in Korea. He has also expressed strong confidence in Coupang Eats’ potential to investors.
During Coupang’s Q3 2024 earnings conference call in November last year, Bom Kim remarked, “The enthusiastic response from Coupang Eats customers who have experienced our exceptional service and value is highly encouraging.”
Bom Kim’s ambitions for Coupang Eats extend beyond Korea. Two weeks ago, Coupang Eats began a pilot operation in Minato, Tokyo. The move marks Coupang’s second attempt to break into the Japanese market, following its previous entry with a 10-minute quick commerce service, which was withdrawn after two years. The industry is closely watching how this new approach will unfold.
#Baemin #CoupangEats #KimBeomseok #BomKim #FoodDelivery #Korea #Ecommerce #TechCompetition #DigitalBusiness #Startup
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- Hyundai E&C rebounds: CEO Lee Han-woo’s road from loss to profit
- Hyundai Engineering & Construction (Hyundai E&C) is seeking a path to recovery after recording its largest-ever loss last year.
CEO Lee Han-woo is expected to focus on a swift performance rebound and the stable execution of quasi-independent projects to achieve the company's ambitious goal of reaching a record-high operating profit this year.
According to an analysis compiled by the securities industry on the 31st, following the implementation of a “big bath” accounting strategy in 2024 to address potential losses, expectations are growing that Hyundai E&C will record its highest operating profit since 2016.
According to financial information provider FnGuide, Hyundai E&C’s consolidated operating profit for this year is projected to average KRW 962 billion (USD 693.9 million), which is more than KRW 200 billion (USD 144.3 million) higher than the KRW 700 billion (USD 504.9 million) range forecast before the company's earnings announcement on the 22nd.
In the fourth quarter of last year, Hyundai E&C reflected losses of approximately KRW 1.3 trillion (USD 937.5 million) at its subsidiary Hyundai Engineering due to cost adjustments at overseas sites, while also absorbing about KRW 400 billion (USD 288.6 million) in losses on its own.
As a result, Hyundai E&C recorded a consolidated operating loss of KRW 1.22 trillion (USD 879.9 million) last year. However, it is being evaluated positively that the company has completely removed factors that could continue to erode profitability.
Jang Yoon-seok, a researcher at Yuanta Securities, stated, “The market’s focus is on Hyundai E&C’s 2025 performance rather than the massive loss recorded in 2024,” adding, “The recent cost reassessment suggests that the fourth quarter of last year was the lowest point, and the company now has a clear direction for improving profits.”
However, the current operating profit forecast for Hyundai E&C still raises questions about whether it can achieve the aggressive management target of KRW 1.18 trillion (USD 851.6 million) in consolidated operating profit set by CEO Lee.
For the first time in five years since 2020, Hyundai E&C has publicly announced its operating profit target, which places considerable expectations and pressure on CEO Lee, the first executive from a vice president-level background to lead the company.
This year’s operating profit target is higher than the previous peak of KRW 1.16 trillion (USD 837.9 million) in 2016. Considering that last year’s operating loss was more than three times the KRW 382.6 billion (USD 275.9 million) loss recorded in 2001 during the company’s workout period, this year’s target is seen as highly ambitious.
Breaking down Hyundai E&C’s consolidated operating profit target for this year, excluding other business segments, the standalone figure for Hyundai E&C is KRW 443.9 billion (USD 320.1 million), while Hyundai Engineering is expected to contribute KRW 633.1 billion (USD 456.5 million). Since Hyundai Engineering absorbed a significant portion of last year’s cost adjustments, it is expected to see a relatively stronger rebound compared to Hyundai E&C.
The last time Hyundai E&C’s standalone operating profit was lower than Hyundai Engineering’s consolidated figure was in 2021, emphasizing the urgent need for Hyundai E&C to improve its performance.
Analysts in the securities industry believe that whether Hyundai E&C can achieve its full-year consolidated operating profit target will depend on whether it can demonstrate improved profitability early in the year.
Given this situation, Hyundai E&C’s first-quarter results under CEO Lee’s leadership are expected to face significant scrutiny.
Lee Tae-hwan, a researcher at Daishin Securities, noted, “Considering Hyundai E&C’s profit target, the likelihood of generating profits this year rather than incurring one-time costs is high.” However, he added, “Since market expectations have risen, it is crucial that the company immediately enters a profit-improving trajectory starting from the first quarter.”
CEO Lee is likely anticipating structural improvements in cost rates at domestic construction sites, in addition to the elimination of losses from overseas projects.
Hyundai E&C expects to secure profitability as the proportion of domestic construction projects that began in 2021–2022, during a period of soaring raw material prices, starts to decline significantly this year.
The proportion of Hyundai E&C’s domestic residential construction sites, which reflected high costs in the past, is expected to decrease from over 70% last year to around 50% this year. This marks the company’s transition into a “normalization” phase, where low-profit projects are being completed sequentially.
Furthermore, CEO Lee is also looking at profitability improvements through the initiation of quasi-independent projects, where Hyundai E&C participates as both an investor and construction contractor.
Hyundai E&C’s quasi-independent projects, in partnership with Inchang Development, are set to begin sequentially, starting with the KRW 5 trillion (USD 3.6 billion) development of the CJ factory site in Gayang-dong.
Beyond the Gayang-dong CJ factory site, where Hyundai E&C recently completed its project financing (PF) conversion and is set to begin construction in March, the company is also involved in the development of the Hilton Hotel site near Seoul Station, the E-Mart Gayang branch site, the Le Méridien Hotel site in Yeoksam, and the Crown Hotel site in Itaewon.
These projects are considered highly profitable, as they generate both construction profits and development profits from sales and disposals, resulting in a higher return than traditional contract-based projects. According to industry estimates, Hyundai E&C’s gross profit margin (GPM) from quasi-independent projects is expected to be twice that of regular contract projects.
However, one potential risk is that Hyundai E&C’s credit rating could be affected by the “big bath” strategy, which could, in turn, impact its quasi-independent projects. A downgrade in credit rating could lead to higher project financing costs, reducing profitability.
Jo Jung-hyun, a researcher at IBK Investment & Securities, commented, “Hyundai E&C’s large-scale ‘big bath’ has raised expectations for a strong earnings rebound by eliminating concerns about future contingent costs.” However, he warned, “If the company’s credit rating is downgraded, increased PF financing costs could harm the profitability of its quasi-independent projects.”
Following Hyundai E&C’s earnings announcement, Korea Ratings issued a report stating that it would incorporate factors such as “the specific reasons for site losses and the potential for future business performance improvement, changes in fundamental business competitiveness including overseas project management capabilities, and financial resilience, including PF contingent liabilities” into Hyundai E&C’s credit rating (AA-/Stable).
Meanwhile, Korea Investors Service maintained Hyundai Engineering’s corporate credit rating at “AA-” but downgraded its rating outlook from “Stable” to “Negative” due to the company’s large losses, the time required for recovery in business and financial stability, and uncertainties in cost management.
However, some analysts believe that Hyundai E&C’s abundant cash holdings and stable financial indicators, combined with the strong capabilities of its parent group, reduce the likelihood of a credit rating downgrade.
As of the end of last year, Hyundai E&C’s consolidated cash and cash equivalents, including short-term financial instruments, stood at KRW 5.39 trillion (USD 3.89 billion), with a net cash balance of KRW 2.15 trillion (USD 1.55 billion). The company’s liquidity ratio (144.7%) and debt ratio (178.8%) are also considered strong within the construction industry.
Additionally, Hyundai E&C’s current credit rating does not factor in potential support from the Hyundai Motor Group. If group support were to be reflected, it could have a positive impact on the company’s credit rating.
Korea Ratings stated, “Since a significant portion of losses was incurred by Hyundai Engineering, Hyundai E&C’s overseas business losses are relatively smaller on a standalone basis,” adding, “If business performance gradually recovers and construction payments from completed housing projects are collected smoothly, the company should be able to maintain financial resilience.”
However, the agency also cautioned, “If Hyundai Engineering’s earnings uncertainty continues, it could inevitably have a negative impact on Hyundai E&C’s creditworthiness. We will further review the impact of this loss on Hyundai E&C’s standalone credit rating as well as the potential for intra-group support in times of crisis.”
#HyundaiE&C #LeeHanWoo #OperatingProfit #ConstructionIndustry #BigBath #FinancialRecovery #ProjectFinancing #HyundaiEngineering #StockMarket #BusinessStrategy
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- Ham Young-joo Set for Reappointment as Hana Financial Group Chairman, Secures Final Candidacy for a New 3-Year Term
- Ham Young-joo, CEO & Chairman of Hana Financial Group, has been recommended as the final candidate for the next chairman.
His recommendation as the final candidate effectively confirms his appointment as the next chairman, ensuring his reappointment.
Ham Young-joo, CEO & Chairman of Hana Financial Group, has been selected as the final candidate for the next chairman of the group.
Hana Financial Group announced on the 27th that it had conducted in-depth interviews with the shortlisted candidates and confirmed Ham Young-joo as the final candidate for the next chairman.
Ham is expected to be officially appointed as the next CEO & Chairman after the regular general shareholders' meeting and board meeting scheduled for March.
The in-depth interviews focused on four key areas: "entrepreneurship," "vision and mid-to-long-term management strategy," "expertise, experience, and global mindset," and "network and other competencies." Each candidate presented their proposals based on 14 detailed evaluation criteria.
The Chairman Candidate Recommendation Committee (CCRC) of Hana Financial Group explained the background of Ham’s recommendation, stating, "With increasing internal and external uncertainties, it is more important than ever to have a leader with proven leadership, extensive experience, and deep management expertise to stably guide the group."
Ham Young-joo has served as the president of the merged Hana Bank and as vice chairman of Hana Financial Group before taking on the role of group chairman in 2022 for a three-year term.
The CCRC highlighted Ham’s leadership in driving the group’s growth through risk management and ESG (Environmental, Social, and Governance)-based management during his tenure as chairman.
The committee further noted, "As the group’s CEO, Ham Young-joo enhanced organizational efficiency through effective management, internalized risk management and internal controls, and contributed to Hana Financial Group achieving its highest-ever business performance and record-high stock prices. This has led to both quantitative and qualitative growth of the group."
Additionally, they emphasized his contributions to social responsibility, stating, "Ham Young-joo has demonstrated his managerial capabilities by fostering sustainable corporate value through initiatives such as completing the construction of 100 childcare centers as part of a shared growth strategy. Amidst the rapidly changing financial landscape, he is deemed the right person to navigate uncertainties and strengthen the group’s competitiveness for the future."
Ham’s next term as chairman will be three years.
Previously, in December 2024, Hana Financial Group had selected five final candidates for the chairmanship—three internal candidates and two external candidates.
The internal candidates included Ham Young-joo, Lee Seung-yeol, Vice Chairman of Hana Financial Group, and Kang Sung-mook, Vice Chairman of Hana Financial Group and President of Hana Securities. The identities of the two external candidates were not disclosed.
#HanaFinancialGroup #HamYoungjoo #CEO #Chairman #Banking #Finance #Leadership #ESG #RiskManagement #CorporateStrategy
