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- Hotel Shilla's Two Secret Weapons by Lee Boo-jin Rise Fast, Offering Support Amid Duty-Free Slump
- Lee Boo-jin, President and CEO of Hotel Shilla, is seeing a rebound in the performance of the subsidiaries she identified as new growth engines.
While the earnings of these subsidiaries are not enough to offset the deficit from the struggling Shilla Duty Free business due to the downturn in the duty-free market, they are starting to provide Hotel Shilla with a modest cushion to lean on.
According to performance data released on March 28, the two wholly owned subsidiaries of Hotel Shilla—SBTM and SHP—have shown a clear trend of improving profitability over the past three to four years.
SBTM specializes in business travel solutions, including flight and train bookings, hotel and meal reservations, and visa processing. SHP is a company that manages fitness clubs under consignment.
These two companies came into the spotlight after Lee first mentioned them as future growth drivers during a regular shareholders' meeting three years ago.
At the time, Lee said, “New growth businesses such as SBTM and SHP will actively implement growth strategies across both online and offline channels through swift and efficient decision-making.”
The fact that the two companies highlighted by Lee are now delivering improved results suggests that Hotel Shilla's growth strategy is beginning to take root.
Looking at SBTM alone, its revenue has fluctuated. It recorded KRW 44 billion (US$ 31.7 million) in 2021, KRW 36.5 billion (US$ 26.3 million) in 2022, KRW 34.8 billion (US$ 25.1 million) in 2023, and KRW 36.7 billion (US$ 26.5 million) in 2024.
However, the trend is different when it comes to net profit. SBTM’s net profit rose from KRW 1.075 billion (US$ 775,200) in 2021 to KRW 1.079 billion (US$ 777,100) in 2022, KRW 1.985 billion (US$ 1.43 million) in 2023, and KRW 3.677 billion (US$ 2.65 million) in 2024. In terms of net profit margin, it rose more than fourfold from 2.4% in 2021 to 10.0% in 2024.
SBTM’s operating profit also showed a rising trend: KRW 1.2 billion (US$ 866,000) in 2021, KRW 1.567 billion (US$ 1.13 million) in 2022, KRW 1.7 billion (US$ 1.22 million) in 2023, and a sharp increase to KRW 4.3 billion (US$ 3.1 million) in 2024.
This growth appears to be driven by an increase in overseas business trips by Samsung Group affiliates, which make up the majority of SBTM’s client base. The company suffered during the COVID-19 pandemic due to travel restrictions but has been stabilizing in the post-pandemic endemic phase.
In 2023, internal transactions with Samsung Group accounted for KRW 26.6 billion (US$ 19.2 million), or 76.4% of SBTM’s total revenue of KRW 34.8 billion (US$ 25.1 million). Of this, Samsung Display accounted for KRW 13.8 billion (US$ 9.95 million), Samsung Electronics KRW 9.3 billion (US$ 6.7 million), Samsung Electro-Mechanics KRW 850 million (US$ 613,100), and Samsung SDI KRW 742 million (US$ 535,000).
SBTM was in a tough spot as recently as 2021, partly due to frequent leadership changes. After being established in October 2017, the company was led for three and a half years by former CEO Ko Kyung-rok, who stepped down in May 2021. He was succeeded by Cho Jung-wook, then Executive Vice President of Hotel & Leisure at Hotel Shilla, but he resigned just four months later.
Park Min, who had served as head of new business planning at Hotel Shilla, was next appointed as CEO, but he also stepped down after four months.
The next CEO chosen by Lee Boo-jin was Lee Kang-il, a former executive of Hotel Shilla. He had quietly stepped down to become an advisor in Q4 2020 after the duty-free business took a hit from COVID-19, but returned a year later to lead the subsidiary.
Under CEO Lee Kang-il’s leadership, SBTM appears to be seeing results in its management efficiency efforts.
In 2024, SBTM's labor costs increased by about KRW 3 billion (US$ 2.2 million), but cost of sales and other operating expenses decreased by KRW 2 billion (US$ 1.4 million) and KRW 1.5 billion (US$ 1.1 million), respectively, leading to higher profitability.
SHP is also improving its profitability. Revenue rose from KRW 39.1 billion (US$ 28.2 million) in 2022 to KRW 58.2 billion (US$ 42 million) in 2023 and KRW 64.4 billion (US$ 46.4 million) in 2024. Net profit increased from KRW 3.6 billion (US$ 2.6 million) in 2022 to KRW 4.4 billion (US$ 3.2 million) in 2023 and KRW 5.1 billion (US$ 3.7 million) in 2024.
SHP was spun off as an independent legal entity in January 2022 from Hotel Shilla’s sports facility operations division. Hotel Shilla entered the fitness business in 1993 with the opening of the Samsung Sports Center.
Based on its know-how in operating fitness clubs, Hotel Shilla opened VANT in 2004, which at the time was the largest fitness club in Asia. SHP is now known to operate dozens of offline fitness locations.
The strong performance of SBTM and SHP is likely to provide some relief for their parent company, Hotel Shilla.
Due to the slump in the duty-free market, Hotel Shilla faced major difficulties last year. The duty-free distribution (TR) division recorded an operating loss of KRW 75.7 billion (US$ 54.6 million), effectively erasing the KRW 64.5 billion (US$ 46.5 million) in operating profit generated from the hotel and leisure segment.
Nonetheless, the improved profitability of the two subsidiaries, whose performance is included in Hotel Shilla’s consolidated results, is helping offset the overall operating loss to some extent.
SBTM is even being considered as a potential asset for sale as part of Hotel Shilla’s financial restructuring efforts.
A Hotel Shilla spokesperson commented, “The rumors about SBTM being up for sale are not true. Various options are being reviewed as part of our efforts to improve financial structure.”
#LeeBooJin #HotelShilla #SBTM #SHP #newgrowthengines #dutyfreemarket #corporatesubsidiaries #businessperformance #SamsungGroup #Koreanbusinessleaders
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- Chang In-hwa Sharpens POSCO Group’s Restructuring, Steel Competitiveness Gains Now Crucial
- Chang In-hwa, Chairman and CEO of POSCO Holdings, has changed.
Immediately after taking office, Chairman Chang displayed a gentle leadership style, embracing several executives who had previously followed former POSCO Holdings Chairman Choi Jeong-woo.
However, a year into his term, his leadership has taken a sharper turn with aggressive restructuring and personnel reshuffles.
What kind of changes will the POSCO Group undergo over the next two years?
◆ Chang In-hwa’s Relentless Drive for Reform
Chairman Chang is transforming the structure of POSCO Group through high-intensity restructuring.
The executive appointments carried out in December 2024 reflected Chang’s intentions to push for bold generational change, a zero-tolerance policy on safety incidents, increased internal promotions within business units, and expanded appointment of female executives.
The number of executives was significantly reduced from 92 to 62. The number of promotions was cut by more than 30% compared to previous years. Executives born before 1963 stepped down from the frontlines of management, while younger talent born in the 1970s was actively promoted.
In this wave of change, Lee Si-woo, former CEO of POSCO who served during former Chairman Choi’s tenure, and Jeon Joong-seon, former CEO of POSCO E&C and a close associate of Choi, also stepped down from management.
Chairman Chang is also carrying out structural reforms by divesting low-profit businesses and non-core assets.
In 2024 alone, he rebalanced 45 assets, including restructuring underperforming service centers in China and selling a heavy oil power generation company in Papua New Guinea, securing KRW 662.5 billion (US$ 477.8 million) in cash.
In 2025, POSCO plans to carry out additional restructuring of 61 businesses, aiming to secure KRW 1.5 trillion (US$ 1.08 billion) in cash.
This year, the dissolution of POSCO CNGR Nickel Solutions, a nickel refining joint venture with Chinese company CNGR, was decided. The sale of the Zhangjiagang Pohang Stainless Steel Plant in Jiangsu Province, China—classified as a low-profit asset—is also under review. POSCO International is proceeding with the partial sale of its textile plant operations in Uzbekistan, a business carried over from the Daewoo era.
The cash secured through these efforts will be reinvested into core growth businesses and used for shareholder returns.
#POSCOHoldings #ChangInHwa #restructuring #executivechange #assetdivestment #POSCOstrategy #businessreform #corporateleadership #Koreansteel #POSCOgroup
◆ Strengthening Steel Core Competitiveness, Chang In-hwa’s Determination
Chairman Chang expressed his commitment to strengthening the core competitiveness of POSCO’s steel business upon taking office.
At his inauguration ceremony on March 21, 2024, he said, “The steel business is the strong foundation of national industry and the group’s growth,” adding, “We will competitively develop innovative products that customers want, boldly promote equipment efficiency and process optimization, and build a coexistence ecosystem with demand industries.”
However, his strategy to strengthen core steel competitiveness did not yield short-term results amid a worsening business climate.
Last year, Korea’s steel industry faced an uncertain future due to the construction sector slump and aggressive price competition from Chinese steel imports.
On February 20, the Trade Commission of the Ministry of Trade, Industry and Energy issued a preliminary determination that domestic industries were being harmed by dumping of Korean hot-rolled steel plates. The ministry announced that it would release countermeasures in March to block circumvention of dumping via steel imports.
Global steel demand is also steadily declining.
At a seminar titled “Changes in the Trade Environment of the Steel Industry and Response Strategies,” held at the National Assembly on December 10, 2024, Lee Yoon-hee, a researcher at the POSCO Research Institute, stated, “Due to continued low growth in global steel demand, oversupply issues are resurfacing.”
He added, “Although positive growth in demand is expected for the first time in four years, the recovery remains below expectations,” and predicted that “without China’s will to restructure, efforts to correct the imbalance will face limitations.”
The deteriorating external environment led to a drop in performance.
In 2024, POSCO Holdings recorded revenue of KRW 7.688 trillion (US$ 5.55 billion) and operating profit of KRW 2.174 trillion (US$ 1.57 billion), down 5.8% and 38.4%, respectively, from 2023.
Despite this, Chairman Chang has remained focused not on short-term performance but on securing breakthrough opportunities through ultra-competitive manufacturing capabilities.
It is expected that the results of Chairman Chang’s determination will begin to emerge as early as this year.
China is now entering into steel industry restructuring. At the 2025 National People’s Congress and Chinese People’s Political Consultative Conference (known as the Two Sessions), China mentioned plans to control crude steel production and promote industrial restructuring in the steel sector.
The National Development and Reform Commission (NDRC) of China stated, “We will promote steel industry restructuring through production cuts,” adding, “We will introduce production reduction policies and industry regulations to end the current overheated competition.”
Reuters and other foreign media analyzed that China's steel production cut could reach up to 50 million tons annually in terms of crude steel.
Industry experts also predict that U.S. President Donald Trump’s policy of imposing a flat 25% tariff on imported steel and eliminating the quota system could benefit POSCO Group. Since POSCO has the capacity to mass-produce high value-added products through technological innovation, it is expected to benefit from the elimination of the quota system.
One such product is POSCO’s cryogenic high manganese steel, which became the world’s first to enter mass production.
High manganese steel is an alloy steel that contains 10–30% manganese in iron, capable of delivering various performance characteristics. It is a new material first developed by POSCO in 2013.
Chairman Chang’s persistence is often cited as the key reason POSCO was able to succeed in developing high manganese steel.
Drawing on his background as a researcher, Chang focused on high manganese steel development even during his time as POSCO President. For commercialization, he personally met with executives at Hanwha Ocean to persuade them to use high manganese steel in the fuel tanks of LNG-powered very large crude carriers (VLCCs).
High manganese steel is known for its high strength, excellent wear and corrosion resistance, and ability to withstand extremely low temperatures. Because of these properties, it is used in tanks that store liquefied natural gas (LNG) and in fuel tanks of LNG-powered vessels.
Considering President Trump is pushing forward an LNG project in Alaska, there is growing speculation that POSCO Group may benefit from it.
On March 4 (local time), in a speech at the U.S. Capitol in Washington, D.C., President Trump stated, “We are building one of the world’s largest natural gas pipelines in Alaska,” and added, “Japan, Korea, and other countries want to invest billions of dollars and become our partners.”
#POSCOHoldings #ChangInHwa #steelindustry #highmanganesesteel #manufacturingcompetitiveness #globalsteelmarket #Chinaovercapacity #Trumpsteelpolicy #LNGmarket #POSCOinnovation
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- Hanwha Backs Thriving Defense Business, While Kim Seung-mo Faces Financial Strain in Construction Division
- Hanwha Corporation, which serves as the holding company of Hanwha Group, is backing the defense business of its subsidiary Hanwha Aerospace by fully participating in the rights offering.
However, some view this move as adding financial burden to Kim Seung-mo, the President and CEO of Hanwha Corporation E&C Division. Although Kim, who also serves as Chairman of Hanwha’s board, made the decision to support the growth of the subsidiary through the capital increase, the construction division—which is already under pressure—could face additional cash outflows and rising debt.
According to Hanwha on March 27, the exact amount of Hanwha's participation in Hanwha Aerospace’s rights offering will be determined after the issue price is finalized on May 29.
Hanwha Aerospace, the defense affiliate of Hanwha Group, is set to conduct a KRW 3.6 trillion (US$ 2.6 billion) rights offering, with new shares to be listed on June 24.
In response, Hanwha held a board meeting the previous day and resolved to acquire all 1,620,298 shares allocated based on its 33.95% stake in Hanwha Aerospace at a tentative issue price of KRW 605,000 per share. The total amount is approximately KRW 980.3 billion (US$ 707.1 million).
Some in the market had speculated that Hanwha might forgo its rights due to tight funding. However, the full participation appears to reflect the parent company's intent to maintain its stake in a key subsidiary and restore market confidence at the group level.
Despite posting record-breaking results last year, Hanwha Aerospace is facing heavy criticism from the market for opting for the largest-ever rights offering in Korean corporate history, instead of using internal funds or loans.
Last year, Hanwha Aerospace posted an operating profit of KRW 1.7319 trillion (US$ 1.2489 billion) on a consolidated basis, nearly three times the figure from the previous year. As of the end of last year, it held KRW 2.9677 trillion (US$ 2.139 billion) in cash and cash equivalents.
While Hanwha Aerospace emphasizes the need for swift, large-scale overseas investments in response to rapidly changing global dynamics, Hanwha is framing its participation as part of enhancing shareholder value and responsible management.
At a shareholders' meeting on March 25, Hanwha Aerospace CEO Sohn Jae-il said, “We considered borrowing for the investment plan, but a sharp rise in the debt ratio and worsening financial structure would be a disadvantage in competitive bids,” adding, “The rights offering was the best choice.”
President Kim Seung-mo also stated in a press release the previous day, “I agree on the need for bold investment by Hanwha Aerospace, and I’m participating in the rights offering to enhance shareholder value and fulfill our responsibility as the major shareholder.”
In its disclosure on the participation, Hanwha described Hanwha Aerospace as “a subsidiary expected to see continued high growth,” signaling strong confidence in the group's defense business.
Analysts inside and outside the market believe Hanwha Aerospace is gaining growth momentum, which may ease some pressure on President Kim. However, there is also notable concern that the rights offering could bring both positive and negative implications for Hanwha.
Hanwha plays the role of the holding company at the top of the group’s governance structure. It holds stakes in major subsidiaries such as Hanwha Solutions (36.15%) and Hanwha Life Insurance (43.24%), in addition to Hanwha Aerospace.
Hanwha Aerospace is considered Hanwha’s most valuable subsidiary. Its performance directly impacts Hanwha’s consolidated earnings and financial health.
Particularly, Hanwha Aerospace's earnings and financial indicators are expected to have a positive impact on Hanwha’s credit rating.
Korea Investors Service and NICE Investors Service cite the improved creditworthiness and financial structure of core subsidiaries like Hanwha Aerospace as factors supporting an upgrade to Hanwha’s credit rating (A+). This is especially important as Hanwha Solutions (AA-) recently received a “negative” outlook due to poor performance and declining financial stability, making Hanwha Aerospace even more critical.
On March 21, Korea Investors Service noted in a report on the rights offering, “We will monitor changes in the creditworthiness of Hanwha Solutions and Hanwha Aerospace, which support Hanwha’s credit rating,” adding, “Hanwha Aerospace (AA-/Stable) is expected to see a positive impact on its credit rating due to the capital increase from the rights offering.”
On the other hand, there is criticism that the parent company is bearing the burden of financing investments in a strong-performing subsidiary. This could place a heavy strain on President Kim, who leads Hanwha’s construction division, especially as the division is under pressure to improve its finances amid recent underperformance.
Hanwha plans to fund its KRW 980 billion (US$ 707 million) participation in the rights offering through a combination of cash and financing.
Although only an overall plan has been announced and specific figures are yet to be determined, Hanwha’s current financial position shows limited cash reserves, which is considered a burden.
As of the end of last year, Hanwha held KRW 186.8 billion (US$ 134.7 million) in cash and cash equivalents on a separate (non-consolidated) basis.
For a company like Hanwha, whose core business is construction, this figure ranks third-lowest among the top 20 construction firms by the Ministry of Land, Infrastructure and Transport's construction capability assessment, after Kumho Construction (KRW 182.1 billion or US$ 131.3 million) and Seohee Construction (KRW 184.8 billion or US$ 133.2 million).
As the construction industry struggles at the bottom of a downturn, many companies are striving to secure liquidity to ensure stability. However, with limited available cash, Hanwha’s construction division appears to be moving in the opposite direction by participating in Hanwha Aerospace’s rights offering.
In reality, most of the capital for the rights offering is expected to come from borrowings, which would likely increase the debt ratio—a key indicator of financial soundness.
Hanwha’s separate debt ratio rose to 220.9% at the end of 2022 after merging with Hanwha Construction, then fell to 209% at the end of 2023, and again to 194.3% by the end of last year. However, the rights offering participation this year introduces a new factor for an increase. It appears that Hanwha, not Hanwha Aerospace, will absorb the impact of a rising debt ratio.
This financial burden could negatively affect Hanwha’s credit rating. Korea Investors Service and NICE Investors Service cite the increasing standalone financial burden as a factor that could lead to a downgrade in Hanwha’s credit rating.
However, Hanwha Group stresses that Hanwha still has access to liquidity and that, at the group level, the benefits of growing a key affiliate and enhancing shareholder value outweigh the risks.
It is understood that Hanwha used its cash holdings to repay debt and reduce the debt ratio, rather than hoarding cash, as part of a strategy to lower financial costs.
Hanwha Group explained that the company’s available funds in the short term exceed KRW 900 billion (US$ 649 million), well above its current cash and cash equivalents.
This figure includes KRW 180 billion (US$ 129.7 million) in cash and cash equivalents and undrawn credit lines. These undrawn lines refer to borrowing facilities that can be drawn or repaid as needed.
Korea Investors Service pointed out, “Since the exact amount of participation and funding plan for the rights offering has not yet been finalized, it is difficult to predict Hanwha’s actual funding burden and changes in financial structure, so additional monitoring is needed.”
A Hanwha Group official stated, “Hanwha’s borrowings and debt ratio will inevitably increase due to the rights offering participation,” but added, “However, the continued growth of Hanwha Aerospace will play a major role in increasing shareholder value not only for Hanwha Aerospace but also for Hanwha.”
#Hanwha #HanwhaAerospace #rightsOffering #defenseindustry #creditrating #financialburden #constructionbusiness #corporatefinance #Koreanconglomerate #subsidiarygrowth
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- SK hynix Sells Out This Year's HBM Supply, Kwak Noh-jung Says Next Year's Will Be Gone by Mid-Year
- Kwak Noh-jung, President and CEO of SK hynix, announced that the entire production volume of high-bandwidth memory (HBM) for this year has already been sold, and the volume for next year is expected to be "sold out" within the first half of this year.
He also stated that the advanced 1c DRAM process will be applied to various sectors and that the company will continue to maintain competitiveness in the next-generation 1d process.
SK hynix held its 77th Annual General Meeting of Shareholders on March 27 at its headquarters in Icheon, Gyeonggi-do.
Regarding this year’s business outlook, Kwak said, “Despite the continued spread of protectionism and geopolitical uncertainties, the demand for memory semiconductors in the artificial intelligence (AI) sector is surging due to increased investment by big tech companies.”
Citing data from an external market research firm, Kwak projected that demand for HBM this year would increase 8.8 times compared to 2023. He also forecasted that demand for enterprise solid-state drives (eSSD) would rise 3.5 times.
“Due to the nature of HBM products, they require high costs and long development times,” he said. “The volume for 2025 has already been sold out, and the 2026 volume is also expected to be sold out within the first half of this year.”
He continued, “We will maintain technological competitiveness in the 1d-nano DRAM process,” adding, “We are preparing to apply the 1c-nano technology to various sectors.”
The difficulty level of advanced DRAM processes increases in the order of 1a (4th generation), 1b (5th generation), 1c (6th generation), and 1d (7th generation), with higher generations offering better power efficiency and performance. Since HBM is made by vertically stacking DRAM, DRAM technology directly translates into HBM competitiveness.
In the second half of last year, SK hynix became the first in the industry to succeed in producing DDR5 DRAM using 1c-nano technology. Rival Micron recently succeeded in developing the 1c-nano process, while Samsung Electronics is understood to have stabilized its 1b-nano technology.
SK hynix is currently developing the more advanced 1d-nano technology.
He also stated, “We will begin mass production of the sixth-generation HBM4 and the low-power memory semiconductor module 'SOCAMM (Small Compressed Add-On Memory Module)' this year.”
He said, “We have provided samples of the 12-layer HBM4 product to customers and will begin mass production in the second half of the year,” adding, “We are working with major clients to respond to the SOCAMM market, and it is also scheduled for mass production this year.”
SOCAMM is a low-power memory semiconductor module newly developed by Nvidia and will be installed in its upcoming AI server, the Blackwell Ultra (GB300), which is set to launch in the second half of this year.
Due to its low power consumption, it is expected to be used in future industries such as robotics, autonomous vehicles, and AI PCs, and is being dubbed the next-generation HBM.
Meanwhile, the proposals presented at the shareholders’ meeting, including the approval of financial statements, appointment of directors, and approval of director compensation limits, were all passed as originally proposed.
Kwak was reappointed as an inside director, and Han Myung-jin, President and CEO of SK Square, was appointed as a non-executive director. The director compensation limit was set at KRW 15 billion (US$ 10.8 million).
#SKhynix #HBM #AIsemiconductors #KwakNohjung #1cDRAM #1dDRAM #DDR5 #SOCAMM #HBM4 #Nvidia
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- Chung Ji-sun and Chung Kyo-sun’s Sibling Leadership at Hyundai Department Store Group—No Split?
- GS Group, LS Group, Shinsegae Group, and CJ Group are well-known in the business world for sibling or family management.
Hyundai Department Store Group is also moving toward successful “sibling management” like these groups.
Chung Kyo-sun, Vice Chairman of Hyundai Department Store Group, was promoted to Chairman of Hyundai Home Shopping in the year-end executive appointments in 2024. This not only strengthens the independent management system within the group but also increases the weight of responsibility in sibling management.
Chairman Chung Kyo-sun is the second-largest shareholder of Hyundai GF Holdings, the holding company of Hyundai Department Store Group, holding a 29.14% stake as of the 2024 business report.
Although there is about a 9.5 percentage point difference in shares with Chung Ji-sun, Chairman of Hyundai Department Store Group and the largest shareholder, it would be entirely possible for him to split off the affiliates if he wished.
Nevertheless, Hyundai Department Store Group has chosen to continue sibling management rather than pursuing separation. Industry observers point out that the reason is the harmonious division of roles and joint management between Chairman Chung Ji-sun and Chairman Chung Kyo-sun.
◆ Hyundai Department Store’s sibling management moves toward “perfect division of roles”
Chairman Chung Ji-sun leads the group’s core businesses such as retail, including Hyundai Department Store, and fashion brands like Handsome.
In contrast, Chairman Chung Kyo-sun is focused on non-retail businesses, overseeing media operations through Hyundai Home Shopping and the food sector via Hyundai Green Food.
The two operate their respective areas independently while maintaining a cooperative relationship across the group through the holding company Hyundai GF Holdings, thereby establishing a solid sibling management system.
The strong interconnection between businesses such as Hyundai Department Store and Hyundai Home Shopping is another reason sibling management is more advantageous than splitting affiliates.
Hyundai Home Shopping can leverage the brand power of Hyundai Department Store to generate distribution synergy, while Hyundai Department Store can accelerate “digital transformation,” a key retail trend, using Hyundai Home Shopping’s media commerce capabilities.
◆ What does Chung Kyo-sun’s promotion to Chairman of Hyundai Home Shopping mean?
Some speculate that Chung Kyo-sun’s promotion to Chairman of Hyundai Home Shopping while retaining the position of group Vice Chairman could be a strategic move in preparation for future affiliate separation.
There is speculation that he might eventually seek independence as the “Chairman” of a Hyundai Home Shopping Group.
However, the prevailing view in the business world is that Hyundai Department Store Group is not currently considering affiliate separation.
Hyundai Department Store Group is working to transform itself from a department store-centered retailer into a comprehensive retail group covering digital, media, and platform businesses. In this context, there is little reason to spin off Hyundai Home Shopping, which could become the central axis of its media business.
Of course, depending on the business directions of major affiliates and the extent to which Chairman Chung Kyo-sun strengthens independent management, discussions about affiliate separation could resurface in the long term.
An industry insider said, “If Hyundai Department Store Group had intended to pursue separation, the transition to a holding company would have been a much better opportunity,” adding, “Given that they dismissed the possibility of separation at the time and shifted to a single holding company structure, it seems unlikely they will move toward separation now.”
Some in the industry also note similarities between Hyundai Department Store Group and GS Group in terms of sibling management based on “division of roles” and “joint management.”
◆ Learning from GS: A successful model of sibling management sustained for 20 years
There are many large business groups that operate under sibling or family management. However, only a few, like GS Group and LS Group, have continued joint management without affiliate separation.
Among them, GS Group is often cited as a model case of sibling management. Since separating from LG Group in 2004, each family branch within GS has independently operated its own affiliate while maintaining a stable sibling management system.
President Huh Se-hong of GS Caltex, President Huh Seo-hong of GS Retail, and President Huh Yoon-hong of GS E&C each manage their respective areas with independence, while under the leadership of GS Group Chairman Huh Tae-soo, all family branches come together under the holding company GS to coordinate the group’s overall direction.
The long-term stability of sibling management at GS Group—with no major power struggles—since its split from LG Group is attributed to this well-balanced structure.
A source in the retail industry said, “Hyundai Department Store Group is not a business group composed of multiple family branches like GS Group,” but added, “If the group aims to maintain sibling management long-term without separation, clearly defining roles and ensuring an independent decision-making structure between brothers, like GS, will be key.”
#HyundaiDepartmentStoreGroup #ChungKyoSun #ChungJiSun #siblingmanagement #HyundaiHomeShopping #GSGroup #businessleadership #corporategovernance #Koreanconglomerates #retailindustry
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- LG Electronics Teams Up with Microsoft on AI and Data Centers – Cho Joo-wan Set to Post Highest Profit in 4 Years
- Cho Joo-wan, CEO of LG Electronics, is accelerating structural transformation by strengthening cooperation with Microsoft (MS) in areas such as artificial intelligence (AI) agents, data center cooling systems, and quantum computing.
As LG Electronics’ traditional home appliance business faces challenges due to competition from China, the company is expected to post its highest operating profit in four years by supplying MS with a large volume of data center chillers this year.
According to industry reports compiled on March 26, CEO Cho Joo-wan met with Satya Nadella, CEO of MS, who visited Korea to attend the ‘Microsoft AI Tour in Seoul’ event.
During the meeting, the two CEOs discussed various business collaborations related to AI. In particular, they are said to have specified cooperation on AI agents linked to home appliances, which the two companies are co-developing, as well as the scale of MS’s procurement of data center chillers.
Cho reportedly proposed to Nadella that they pursue AI technology development together in the rapidly growing Indian market, citing the country’s strong research and development (R&D) talent as a key advantage.
After the meeting, Cho posted on his social networking service LinkedIn, saying, “In an era where AI is transforming all industries, having a visionary partnership is extremely valuable,” adding, “We shared future strategies focused on co-developing AI agents, data center cooperation, and our journey in the Indian market.”
Some observers speculate that the two may also have discussed cooperation in quantum computing.
On February 20, Nadella posted on LinkedIn about quantum computing, to which Cho responded in a comment, “We are very excited about the innovation of next-generation computing and look forward to exploring potential collaboration opportunities (with LG Electronics).”
In February this year, MS unveiled ‘Mayolina 1’, the world’s first quantum processor. The palm-sized processor can integrate over 1 million qubits—the basic unit of quantum computing—into a single processor.
Nadella expressed confidence about the Mayolina 1, saying, “The prevailing belief was that practical quantum computing would take decades, but we believe it could become a reality within just a few years.”
Strengthened cooperation with MS is expected to have a positive impact on LG Electronics’ performance.
KB Securities forecast that LG Electronics will post KRW 22.4 trillion (US$ 16.1 billion) in revenue and KRW 1.4 trillion (US$ 1.0 billion) in operating profit in the first quarter of this year. This represents a 5% and 3% year-on-year increase, respectively. The annual operating profit is projected to rise 20% year-on-year to KRW 4.1 trillion (US$ 3.0 billion), marking the highest figure in four years since 2021.
One of the key drivers of first-quarter performance is the increase in sales of ‘chillers’—data center cooling systems. MS recently completed final quality certification for LG’s chillers and liquid cooling systems and is expected to place large orders within the year.
The AI agent being co-developed by LG Electronics and MS, which connects to the ‘smart home’, is also expected to contribute positively to performance. At the ‘AI Tour in Seoul’ event, LG Electronics unveiled its smart home robot ‘Q9’.
Jeong Ki-hyun, Executive Vice President of LG Electronics, said, “Q9 plays a key role in the 'multi-AI home hub' strategy, connecting not only home appliances but all customer-centered elements by integrating MS AI technology into ‘Furon’, which learns lifestyle patterns and communicates.”
AI agents, which can be used in various spaces such as smart homes, cars, mobile devices, and airports, are expected to reach a global adoption rate of 80% to 100% by 2026.
LG Electronics plans to use big data from its 700 million home appliance users to train its AI agents. With the help of MS, the company aims to develop high-efficiency AI algorithms and generate significant revenue from AI services.
With Cho’s push to transform LG Electronics into an AI-centered company, attention is focused on whether this strategy can offset recent sluggishness in the home appliance business.
The United States is expected to impose a 25% tariff on LG Electronics’ home appliance exports from its Mexican production base starting next month, which could negatively impact its sales in the U.S.
LG plans to shift production to its Tennessee plant if the Trump administration enforces tariffs, but the relocation is expected to cost several hundred billion won.
Global demand for home appliances is also declining. According to Statistics Korea, global home appliance sales in 2023 stood at KRW 33.98 trillion (US$ 24.5 billion), down KRW 1.83 trillion (US$ 1.3 billion), or 5.1%, from the previous year. Compared to 2021, when sales reached KRW 38.21 trillion (US$ 27.6 billion), the figure is down KRW 4.23 trillion (US$ 3.1 billion), or 11%. Most forecasts suggest that demand will remain sluggish this year as well.
However, the decline in logistics costs, such as shipping fees, which negatively affected last year’s operating profit, as well as LG’s efforts to expand into new markets such as India, Brazil, and Indonesia, are expected to positively impact performance.
#LGElectronics #ChoJoowan #Microsoft #SatyaNadella #AIagents #datacentercooling #quantumcomputing #Mayolina1 #Q9robot #smartHome #AIbusiness #chiller #AIcooperation #LGAItransformation #semiconductors #IndiaMarket #electronicsindustry
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- 10 Years of Park Jeong-won at Doosan – Next in Line: Park Jin-won or Park Gee-won
- “All employees must have the mindset of ‘solidifying the present while preparing for the future.’”
This is what Park Jeong-won, Chairman of Doosan Group, said in his 2025 New Year’s address.
This statement aligns with the management philosophy Park has consistently pursued over the past ten years as the head of Doosan Group.
His ten years of leadership are widely regarded as a period in which he transformed and revived Doosan Group through bold decisions, much like the saying “turning a crisis into an opportunity.”
Park is rewriting the record as the longest-serving chairman since Doosan adopted its sibling-based management system in 1996, and he is now establishing new business pillars for the future, including small modular reactors (SMRs), hydrogen, robotics, and artificial intelligence.
◆ Seeking the Future in Clean Energy, Smart Machines, Semiconductors, and Advanced Materials
Recently, Park Jeong-won has been focusing on smart machines, semiconductors, and advanced materials to ride the wave of AI growth.
Doosan Tesna’s semiconductor back-end process business, the semiconductor materials and components business of Doosan’s Electronics BG, and the smart machine business, including robotics, are all interlinked with artificial intelligence.
Park has paid close attention to these business linkages and has consistently emphasized creating synergy between them.
At CES 2024, Park said, “Doosan possesses technologies and products that apply artificial intelligence in collaborative robots and construction machinery, and we have strong competitiveness. We must continue to explore how AI technologies can be connected to our businesses and seek new opportunities.”
Park’s strong emphasis on AI and semiconductors is likely rooted in his past experience overcoming challenges in developing gas turbines and eventually achieving success.
When Doosan Enerbility began developing large gas turbines around 2013, many doubted it could achieve independent development.
Nevertheless, under Park’s unwavering leadership, Doosan continued development and in 2019 succeeded in becoming the world’s fifth company to independently develop a 270MW large-capacity gas turbine for power generation.
This technological development effort laid the foundation for Park’s vision of a business portfolio centered on three major pillars: energy, robotics, and advanced materials.
However, his business restructuring efforts have not always gone smoothly.
In July 2024, Doosan Group tried to restructure its business portfolio around the three core sectors by having Doosan Robotics absorb and merge with Doosan Bobcat, leading to the latter's delisting.
However, the plan was scrapped due to controversy over shareholder rights and a request from the Financial Supervisory Service for a revised report.
Later in October of the same year, Doosan proposed bringing Doosan Bobcat under Doosan Robotics as a subsidiary without delisting it, but this plan was also withdrawn.
The reason was the unexpected imposition of martial law by the Yoon Suk-yeol administration, which caused stock prices to plummet and made it difficult to continue restructuring efforts.
◆ Overcoming a Liquidity Crisis Through Painful Restructuring
Park Jeong-won appears to remain committed to restructuring the business portfolio.
In his New Year’s address this January, he said, “Let stability be the base, and when opportunities arise, let’s respond swiftly. Even if the current market conditions are tough, opportunities will surely come,” adding, “For collaboration across departments and divisions, active communication and new initiatives must be strongly encouraged.”
This strong will was also a driving force in overcoming the severe liquidity crisis Doosan Group faced in 2019.
At the time, continued losses from Doosan Construction increased the group's financial risks, and with the onset of the COVID-19 pandemic in March 2020, Doosan Group submitted a self-rescue plan to creditors and requested emergency financial support.
Doosan Group then put up for sale key assets such as Doosan Tower, Club Mow CC, Doosan Solus, and the Moto Roll BD, and even promoted the sale of its core affiliate Doosan Infracore.
Some speculated that “Doosan will be left as an empty shell.”
Still, Park pushed ahead with restructuring without wavering.
In a message to employees at the time, he said, “Regardless of the reasons, we take the social impact and responsibility of Doosan Heavy Industries’ crisis very seriously,” and added, “We believe Doosan bears not only financial debt but also social debt, and we will undergo painful reforms.”
Thanks to his efforts, Doosan Group graduated early from the creditor-led management program in February 2022—just 23 months later. It is now regarded as a model case of corporate restructuring in Korean business history.
◆ Park Gee-won and Park Jin-won Emerge as Successor Candidates
Attention is now shifting to who will succeed Park Jeong-won as the next chairman of Doosan Group.
The leading candidates are Park Jin-won, Vice Chairman of Doosan Industrial Vehicle, and Park Gee-won, Chairman and CEO of Doosan Enerbility.
Park Jin-won is being considered because he is the eldest son of former Chairman Park Yong-sung, the third son of Doosan’s founding chairman Park Doo-byung, thus fitting the tradition of sibling-based management and primogeniture succession.
Born in 1968, Park Jin-won joined Doosan Beverage as a junior employee and worked for three years at TriC, the core strategic planning unit established by Park Yong-man, building his reputation as a strategy expert.
As of March 2025, he holds a 3.64% stake in Doosan, the third-largest among shareholders after Park Jeong-won and Park Gee-won.
However, he is not currently involved in Doosan’s core businesses, and he received a suspended indictment in 2021 in relation to the anesthetic drug propofol—both considered significant weaknesses.
Park Gee-won, Park Jeong-won’s younger brother, is regarded as a strong contender due to his influence in the group stemming from his stable leadership of Doosan Enerbility, a key affiliate.
Born in 1965, Park Gee-won is credited with putting next-generation businesses like small modular reactors (SMRs) on a stable path.
At present, Park Gee-won appears most likely to succeed as the next group chairman, given his influence inside and outside Doosan Group.
However, if this happens, management rights would have been passed down solely within the family line of honorary chairman Park Yong-gon, potentially provoking resistance from the Park Yong-sung branch of the family.
◆ The Nightmare of the “Brother Feud”
Doosan Group’s sibling-based management has seen many growing pains before settling into its current form.
Conflict over management rights among brothers began with a clash between Honorary Chairman Park Yong-gon and former Chairman Park Yong-oh.
In 1996, Park Yong-gon handed over the chairmanship to his younger brother Park Yong-oh, but in 2005, he advised him to retire at the end of the year, citing his 10-year tenure.
However, Park Yong-oh resisted and accused his two younger brothers—Park Yong-sung and Park Yong-man, who were next in line for the chairmanship—of corruption, releasing this information through a tip-off.
Prosecutors later confirmed the corruption allegations, leading Park Yong-sung and Park Yong-man to step down from management. They later returned to the business world through special pardons.
But Park Yong-oh, who tried to break the tradition of sibling-based management, was completely expelled from the Doosan founding family.
In 2009, the fourth son, Park Yong-hyun, took over as chairman, followed by the fifth son, Park Yong-man, in 2012, and finally Park Jeong-won in 2016. Since then, Doosan’s sibling-based management has remained relatively stable.
Today, Doosan Group has stabilized through restructuring and currently shows no signs of major internal conflict. Park Jeong-won is still relatively young and may continue as chairman for the long term.
One potential scenario is that Park Jin-won accepts Park Gee-won’s succession, or that he first takes over as chairman in line with family tradition and later passes the role to Park Gee-won.
#DoosanGroup #ParkJeongwon #ParkJiweon #ParkJinwon #DoosanEnerbility #DoosanRobotics #DoosanRestructuring #SMR #AIbusiness #Koreanconglomerates #corporatesuccession #siblingmanagement #crisismanagement #Doosanhistory #cleanenergy #smartmachines #semiconductors #advancedmaterials
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- Is GS E&C Changing Under Owner-CEO Huh Yoon-hong? Plant and Safety Will Be the Litmus Test
- "Based on safety and quality, we will reinforce the fundamentals of the construction business."
This was the message delivered by Huh Yoon-hong, CEO and President of GS Engineering & Construction (GS E&C), to employees during the 2025 New Year’s kick-off ceremony. On its own, it may sound like a typical pledge made by a construction company CEO at the start of the year.
What makes this message special lies in the 'person' who said it and the 'place' where it was said.
Huh is the only owner-CEO among top executives at major construction companies. Moreover, he held the New Year’s ceremony not at an event hall or office, but at the plant construction site of the 'Daesan Coastal Industrial Waterworks Construction Project.'
The significance of the message lies in the fact that the owner-CEO personally visited the site, held the ceremony on-site, and emphasized safety and quality.
On March 6, Huh also visited a construction site for GS E&C's 'Xi' brand to inspect safety. These moves by Huh indicate that GS E&C’s key themes for 2025 are 'plant' and 'safety.'
◆ Can Quick Decision-Making and Responsible Management by the Owner Deliver Results in Plant and Safety?
The emphasis on 'plant' and 'safety' by Huh is all the more meaningful because GS E&C operates under an owner-management system.
Most major construction firms in South Korea are run by professional managers. While Hyundai E&C, DL E&C, POSCO E&C, and Daewoo E&C are all led by professional executives, GS E&C is managed directly by Huh Yoon-hong, a fourth-generation member of the GS Group's founding family.
From June 2013 to 2023, GS E&C maintained a professional management system under former CEO Lim Byeong-yong.
However, after Lim stepped down due to the Incheon Geomdan apartment collapse incident, Huh Yoon-hong took over as CEO and President in the year-end executive reshuffle of 2023, transitioning the company into an owner-management structure.
Compared to professional management, the advantages of owner-management include 'quick decision-making' and 'responsible management.'
These traits of owner-management are expected to be particularly evident in GS E&C's focus on 'plant' and 'safety' this year.
◆ The Future of GS E&C Lies in the Plant Sector — The Power of Fast Decision-Making
GS E&C's focus on the plant business highlights the advantage of quick decision-making under owner-management.
The company began expanding its plant division in earnest after winning the KRW 1.7 trillion (US$ 1.23 billion) 'Fadhili Gas Increment Program Package 2' project in Saudi Arabia.
GS E&C plans to increase annual revenue in the plant sector to over KRW 1 trillion (US$ 721 million) starting this year and to maintain up to KRW 2 trillion (US$ 1.44 billion) annually from next year.
In contrast, GS Enuma, a water treatment subsidiary that GS E&C had previously tried to grow as a new business, is now being sold.
Leveraging the strength of owner-led rapid decision-making, the company is focusing on its core business — plants — while decisively cutting off non-essential operations.
◆ The 'Boneless Xi' Controversy and Safety — A Time That Calls for Owner’s Responsibility
Safety is another area where the strength of responsible management under owner-leadership can be applied. While most construction company CEOs emphasize safety and internal stability, there’s a noticeable difference in weight when it is the owner, not a professional manager, who speaks about safety.
GS E&C suffered a major blow to its brand credibility due to the 'Boneless Xi' controversy that began in 2023. Although time has helped gradually fade the stigma, the brand image has not fully recovered.
In this context, the merits of responsible owner-management can play an important role in rebuilding trust in GS E&C.
Huh Yoon-hong is not stopping at declarations — he is actively visiting sites to emphasize safety.
Since last year, Huh has designated the first Thursday of every month as 'Safety Inspection Day' and has been personally visiting construction sites.
At the 'Xi' brand renewal event (Xi Reignite) held in November last year, Huh stated, “The rebranding of Xi is not just about changing the image, but laying the foundation by strengthening the fundamentals,” expressing his intention to improve the residential environment through more innovative technology and services.
◆ Huh Yoon-hong’s Second Year as CEO — Is Owner-Management Showing Results?
Huh Yoon-hong’s owner-management is starting to show some results.
In 2024, GS E&C recorded KRW 12.7485 trillion (US$ 9.19 billion) in consolidated sales and KRW 325.2 billion (US$ 234.4 million) in operating profit.
Although the estimated 2024 operating margin of 2.6% falls short of the 4.5% in 2022, it is still viewed positively considering the construction industry's ongoing downturn, especially as the company successfully reversed the massive operating loss recorded in 2023 and returned to profitability.
GS E&C has faced various crises. The brand's trust was shaken by the 'Boneless Xi' controversy, and continued uncertainty in the global construction market forced a strategic pivot.
Now, with Huh Yoon-hong strengthening internal operations through direct site involvement as the owner, attention is focused on how he will steer GS E&C in the years ahead.
#GSEngineeringConstruction #HuhYoonhong #ownermanagement #plantbusiness #constructionsafety #BonelessXi #Xibrand #constructionindustry #responsibleleadership #constructionCEO
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- Hana Financial Enters Ham Young-joo’s Second Term, Pushes Value Growth Amid Non-Banking Weakness
- Hana Financial Group is officially entering the “second term of Chairman Ham Young-joo.” Chairman and CEO Ham Young-joo will lead Hana Financial Group for another three years.
Chairman Ham is expected to continue focusing on Hana Financial Group’s growth during his second term. The group has laid out a growth blueprint centered on group synergy. In addition, plans to elevate Hana Asset Management to a group subsidiary are emerging as part of efforts to strengthen the non-banking sector.
According to Hana Financial Group, the agenda to reappoint Chairman Ham as an internal director was approved at the 20th Annual General Meeting held on March 25.
It was widely expected that the reappointment agenda would pass smoothly. This was because it received support from the National Pension Service, the largest shareholder, as well as a majority of foreign shareholders who collectively hold about 70% of the voting rights.
As anticipated, the agenda passed the general meeting without any surprises.
However, the process leading up to Chairman Ham’s reappointment was not entirely smooth.
Chairman Ham still faces legal risks. While he won a final victory in an administrative lawsuit related to losses from overseas interest rate-linked derivative-linked funds (DLFs), he received a partial guilty verdict in the second trial of a hiring corruption case.
If the Supreme Court upholds the guilty verdict, he will have to step down. As a result, global proxy advisory firm ISS recommended voting against his reappointment.
Another burden for Chairman Ham was Hana Financial Group’s amendment of its internal governance regulations ahead of the chairman nomination process. Some viewed this as a move to accommodate his reappointment.
Hana Financial revised its internal governance rules to allow directors to serve their full term even if they turn 70 during their tenure. This change enabled Chairman Ham to receive an additional three-year term.
Despite these burdens, Hana Financial Group’s choice was Chairman Ham. On January 1, the Chairman Candidate Recommendation Committee (ChC) nominated him as the sole final candidate for the next term.
Amid growing domestic and global uncertainties, the committee gave high marks to Chairman Ham’s proven leadership.
In materials explaining the general meeting agenda, Hana Financial Group stated, “(Chairman Ham) has demonstrated sufficient experience and capability to handle both domestic and global political instability and increased financial market volatility,” adding, “He is the right person to enhance corporate value and shareholder returns through both stability and continuous change and innovation.”
In return for the trust placed in him by Hana Financial Group and its shareholders, Chairman Ham is expected to focus on driving another phase of growth for the group during his new term.
Chairman Ham has proposed “group synergy” as the group’s growth engine.
Hana Financial Group is often seen as having asymmetry between its banking and non-banking affiliates. While Hana Bank competes for the top spot in net profit among South Korea’s four major banks, the group’s non-banking affiliates are considered relatively weak in competitiveness.
The synergy between banking and non-banking affiliates is expected to be the key factor in Hana Financial Group’s overall growth.
In his New Year’s address this year, Chairman Ham said, “Close collaboration within and outside the group is essential,” and added, “Our focus should be on enhancing the competitiveness of the non-banking sector and generating sustainable performance by expanding synergy among affiliates across the group.”
Hana Financial Group is also reviewing a plan to elevate Hana Asset Management, currently a subsidiary of Hana Securities, to a direct subsidiary of Hana Financial Group.
An industry insider said, “Designating it as a direct subsidiary rather than a sub-subsidiary changes the significance of the affiliate,” and added, “This shows Hana Financial’s intention to strengthen its asset management business.”
The conversion of the asset management firm into a direct subsidiary is also seen as a way to enhance competitiveness in its non-banking portfolio. Among the four major financial groups in South Korea, Hana Financial is the only one that has an asset management company as a sub-subsidiary.
It is also reported that Hana Financial Group is reviewing various plans to grow Hana Asset Management beyond simply converting it into a direct subsidiary.
In its annual report on governance and compensation systems, Hana Financial Group stated, “Our 2025 management goal is to enhance corporate value through efficient capital allocation and strengthening of core business profits based on ‘solidity and collaboration,’” and added, “By strengthening the core competitiveness of the non-banking sector, we aim to build a foundation for sustainable growth with plans to increase both total assets and profits compared to 2024.”
#HanaFinancialGroup #HamYoungjoo #leadershiprenewal #financialgrowth #groupstrategy #nonbankingbusiness #assetmanagement #HanaAssetManagement #governance #Koreafinance
