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- Samsung E&A’s Namkoong Hong Achieves Cash Accumulation, Dividend Resumption Remains Uncertain
- Namkoong Hong, CEO and President of Samsung E&A, appears to have driven the company’s strong performance last year while also achieving results in accumulating retained earnings.
As Samsung E&A demonstrates financial stability based on solid performance, there is growing anticipation in the industry for the resumption of dividends after 12 years.
However, given the management’s focus on investments for new business expansion amidst an industry downturn, it remains uncertain whether Samsung E&A will decide to resume dividend payments.
On January 8, construction industry insiders speculated that Samsung E&A achieved remarkable results last year, despite the harsh winter facing both large and mid-sized construction companies.
As of the third quarter of 2024, Samsung E&A reported cumulative annual revenue of KRW 7.388 trillion (approximately USD 5.33 billion) and an operating profit of KRW 675.9 billion (approximately USD 488 million).
Compared to the third quarter of 2023, both revenue and operating profit decreased by 5.3% and 6.6%, respectively.
However, new orders are expected to exceed KRW 14 trillion (approximately USD 10.1 billion), setting a record, thanks to favorable conditions in overseas construction projects.
According to the Overseas Construction Integrated Information Service (OCIS), Samsung E&A secured USD 10.98 billion (approximately KRW 16 trillion) in orders from January to November 2024, ranking first.
This marks the first time in 12 years since 2012 (USD 10.5 billion) that Samsung E&A has surpassed USD 10 billion in overseas orders.
Samsung E&A’s high operating profit margin also differentiates it from other construction companies in terms of performance.
As of the third quarter of 2024, Samsung E&A's cumulative operating profit margin stood at 9.1%, significantly higher than the average operating profit margin of 2.76% among the top 10 construction companies.
Driven by high profitability, Samsung E&A’s retained earnings rose to KRW 2.0372 trillion (approximately USD 1.47 billion) on a standalone basis as of the third quarter of 2024. This represents a 58% increase from KRW 1.2932 trillion (approximately USD 936 million) at the end of December 2023.
With ample cash for dividends, the securities industry has called for Samsung E&A to expand its shareholder return policies to enhance corporate value.
In a report published on January 7, Jang Moon-jun, a researcher at KB Securities, cited reasons for the undervaluation of Samsung E&A’s value, including uncertainties in the project market due to falling oil prices, concerns about reduced investments from affiliates, and insufficient decisions regarding the resumption of shareholder returns.
Jang noted, "Investors are waiting for the company’s position or response strategies regarding these three uncertainties," adding, "The company’s response to these concerns could serve as a strong catalyst for a rebound."
However, many believe it will be challenging for Samsung E&A to shift away from its no-dividend pre-investment policy.
In its corporate governance report disclosed last year, Samsung E&A stated that "improving financial structure and investing in new businesses take precedence over dividends."
Despite meeting legal requirements for dividend payments at the end of 2020, Samsung E&A explained that it refrained from paying dividends to achieve a sound financial structure through internal reserves and to invest in future growth.
Regarding future shareholder return policies, the company added, "We will decide on dividend payments comprehensively, considering investments for future growth and achieving a sound financial structure through internal reserves. We will continue to review and guide rational plans to strengthen shareholder rights."
Namkoong’s focus on investing in future growth areas, such as eco-friendly energy businesses, also tempers expectations for dividend resumption.
Namkoong announced plans to allocate KRW 200 billion (approximately USD 144 million) out of a total KRW 370 billion (approximately USD 267 million) investment budget for 2024 to the energy transition sector.
He also set a goal of increasing the share of orders in the energy transition sector to 16% by 2025, establishing it as a core business alongside chemical and non-chemical projects.
Namkoong’s efforts have already translated into contract achievements.
At the end of December 2024, Samsung E&A received a Letter of Award (LOA) for the Phoenix Bio Refinery Project in Malaysia. The main contract is expected to be finalized by January 2025.
This project involves constructing facilities to produce bio-naphtha, a key raw material for various chemical fibers and plastics, as well as sustainable aviation fuel (SAF), which replaces petroleum.
Additionally, Samsung E&A has a pipeline of six energy transition projects for 2025, including Saudi Arabia's SAN-6 Blue Ammonia Project, with a total estimated value of USD 6.7 billion (approximately KRW 10 trillion).
Namkoong also demonstrated a focus on financial stability by appointing Vice President Yoon Hyung-sik, a finance expert, as the head of the Management Support Office and concurrently the Chief Financial Officer.
Previously, the Management Support Office was led by Vice President Kim Dae-won, a non-financial expert who had worked for 30 years at Samsung E&A, handling on-site operations in plants, environment, and energy sectors.
In contrast, Yoon has a background in finance and planning, having served as a manager and team leader in the Management Planning Team.
Over the past two years, he worked on the Samsung C&T EPC Competitiveness Enhancement Task Force, which oversees strategy, personnel, and business coordination for Samsung Heavy Industries, Samsung E&A, and the construction division of Samsung C&T.
Namkoong’s personnel decision for the Management Support Office reflects an intention to further strengthen financial stability during his final year in office.
When asked about the possibility of resuming dividends in 2025, a Samsung E&A official told Business Post in a phone call, "We are likely to maintain our existing policy on dividends, but given our strong performance, we are positively listening to shareholders’ opinions."
#SamsungE&A #NamkoongHong #FinancialStability #DividendPolicy #EnergyTransition #EcoFriendlyInvestment #ConstructionIndustry #RetainedEarnings #SaudiArabiaProject #CorporateGovernance
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- Shinhan Bank's Jung Sang-hyuk Emphasizes 'Qualitative Growth' Amid Hana and KB's Fierce Pursuit
- Jung Sang-hyuk, President of Shinhan Bank, faces fierce competition from rivals in the new year.
Shinhan Bank is expected to maintain its position as the top bank in net profit among domestic banks due to its strong loan growth last year. However, this year, the bank has shifted its strategy to focus on efficient capital utilization, emphasizing capital ratio management over external growth in line with its value-up plan.
On the other hand, Hana Bank has set a goal to reclaim its “leading bank” status by appointing a sales expert as its new president. Meanwhile, KB Kookmin Bank, a traditional powerhouse, is the only one of the four major banks not heavily restricted by financial authorities’ loan regulations, setting the stage for intense competition in the banking sector this year.
On January 7, banking industry insiders suggested that changes in strategies such as value-up plans could reshape the rankings in net profits among banks this year.
Shinhan Bank, which ranked first in net profit among commercial banks last year, hinted at strategic adjustments. As of the third quarter of last year, Shinhan Bank was the only commercial bank to achieve a net profit of over KRW 3 trillion (approximately USD 2.17 billion). With a KRW 300 billion (USD 217 million) lead over second-place Hana Bank, it seemed likely to secure the top spot in net profit for 2024.
At a management strategy meeting on January 3, Jung Sang-hyuk emphasized, “To achieve the goal of corporate value-up, qualitative growth through efficient resource utilization is as important as asset growth, which has been our strength so far.”
Jung's message contrasts sharply with his focus last year, when he emphasized "customer engagement" in his New Year’s address and prioritized strengthening sales capabilities in an organizational reshuffle.
As a result, Shinhan Bank expanded its loans significantly starting early last year, outpacing its competitors among the four major banks (KB, Shinhan, Hana, Woori).
By the end of September 2023, Shinhan Bank’s Korean won loan balance had grown by 10.2% compared to the end of 2022, the only double-digit growth rate among the four banks.
Jung appears to believe that it is time to pause and consolidate, citing the focus on efficient capital use emphasized by major financial holding companies under the “value-up” theme last year.
While increasing loans boosts profit bases, it also raises risk-weighted assets (RWA), which are part of the denominator in calculating the common equity tier 1 (CET1) ratio, potentially straining financial soundness. Additionally, the burden of provisioning for non-performing loans means that loan growth does not necessarily lead to increased corporate value.
In his New Year’s address, Jung stated, “The demand for enhancing corporate value is growing stronger amid the ‘corporate value-up’ movement to modernize capital markets. Financial institutions are increasingly expected to fulfill their social responsibilities, including ESG management, inclusive finance, and internal controls. To sustain meaningful growth, a shift in our growth approach is urgently needed.”
However, industry observers suggest that Jung's strategic adjustment may invite fierce challenges from competitors. While Shinhan Bank is pausing to consolidate, rivals are making bold moves to claim the top spot in net profit.
Hana Bank is a prime example.
Hana Bank has placed Lee Ho-sung, a sales expert and former CEO of Hana Card, at its helm, succeeding financial expert Lee Seung-yeol. This marks a strategic shift toward aggressive performance growth.
Hana Bank has been gaining prominence in recent years. Since the establishment of the four-major-bank structure in Korea, the “leading bank” competition has primarily been between KB and Shinhan. However, Hana Bank broke this dominance by ranking first in net profit in 2022 and 2023.
In his inaugural address on January 2, Lee Ho-sung stated, “Let us restore Hana’s unique customer-focused sales culture DNA” and “join me on the journey to becoming the leading bank.”
Lee is known for emphasizing sales even during challenging times, such as when high interest rates affected the industry during his tenure at Hana Card. His leadership is credited with external growth through initiatives like the success of “Travelog.”
From Shinhan Bank’s perspective, KB Kookmin Bank remains a strong contender in the competition.
Although KB Kookmin Bank ranked third in net profit behind Shinhan and Hana Banks as of September 2023, its relatively higher inclusion of costs related to equity-linked securities (ELS) is seen as evidence of its resilience.
Notably, KB Kookmin Bank was the only one among the four major banks that did not exceed the loan targets submitted to financial authorities last year. As a result, it avoids penalties this year, giving it more room to pursue aggressive sales strategies.
The market expects intense competition in the first quarter of the year, as early loan growth significantly impacts annual net profit.
A representative from a commercial bank stated, “Early-year sales play a critical role in annual performance, so fierce competition is anticipated at the start of the year. However, this year brings additional factors to consider, such as household loan regulations and value-up initiatives.”
#ShinhanBank #JungSanghyuk #HanaBank #LeeHosung #KookminBank #bankingcompetition #valueupstrategy #loanmanagement #financialperformance #bankingindustry
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- Suh Kyung-bae Makes CES Debut, AmorePacific Enters the 'Home Beauty Device Battle'
- Suh Kyung-bae, the Chairman and CEO of AmorePacific Group, is officially entering the home beauty device market.
AmorePacific will unveil a new product from its home beauty device brand at CES 2025, the world’s largest consumer electronics and IT exhibition. Suh's attendance at CES, where AmorePacific will showcase its new home beauty device brand, carries significant meaning as this is his first visit to the event.
Industry insiders suggest that Suh is set to actively target the home beauty device market this year to enhance AmorePacific's global performance.
On January 7, the retail industry projected that AmorePacific would focus more on market diversification and product diversification strategies this year.
AmorePacific will present the "Skin Light Therapy 3S," a new product from its MakeON brand, equipped with generative AI technology developed in collaboration with Samsung Electronics, at CES 2025 in Las Vegas, USA. This product offers personalized skincare functions through a dedicated application and will officially launch in March.
CES is a global technology exhibition where advanced technologies and innovative companies showcase the latest trends. AmorePacific’s decision to unveil a new beauty device at this iconic event signifies its strong commitment to establishing a presence in the home beauty device market.
Suh’s participation is also viewed as a clear demonstration of AmorePacific's intent to make a substantial bet on the beauty device market. Although the company has won CES Innovation Awards for six consecutive years, this marks the first time Suh has personally attended the exhibition.
Suh is reportedly planning to visit the "Wannabeauty AI" exhibition booth, which won an Innovation Award, as well as the Samsung Electronics collaboration booth. He is expected to observe local businesses’ reactions directly to help refine the direction of AmorePacific's beauty device business.
AmorePacific has been operating a beauty device brand for over a decade, yet public recognition remains low. The brand in question is MakeON.
MakeON was launched by AmorePacific in 2014 to target the home beauty market. However, contrary to expectations, it remains a relatively unfamiliar name to consumers.
AmorePacific’s primary focus on cosmetics has hindered its performance in the beauty device market. Compared to the market dominance of companies like APR, AmorePacific’s presence in the beauty device sector has been relatively limited.
Industry insiders believe that AmorePacific's decision to strengthen its position in the beauty device market stems from this context.
AmorePacific is expanding into the home beauty device market as part of its strategy to diversify its market reach and improve profitability. By broadening its product portfolio to include home beauty devices alongside cosmetics, the company aims to find new growth drivers.
Beauty devices are generally higher-priced than cosmetics, making them more efficient for driving growth and profitability, according to industry sources. Additionally, the global home beauty device market is still in its early stages, leaving substantial growth potential.
According to Samil PwC Management Research Institute, the home beauty device market is expected to grow at an average annual rate of 26.1%, reaching USD 89.8 billion (approximately KRW 129 trillion) by 2030. This indicates the rapid onset of the home beauty era.
This move aligns with Suh’s consistent emphasis on a "global rebalancing strategy."
At the 79th anniversary of AmorePacific Group in September last year, Suh emphasized the importance of market diversification, stating, "We must focus on expanding our market through global rebalancing."
Analysts suggest that reducing dependency on the Chinese market and identifying new growth drivers in Western markets is essential.
In this context, Suh appears to be focusing on the beauty device business as a breakthrough for expanding into overseas markets.
A prominent example is APR.
APR's explosive growth in the US market has been largely attributed to its beauty device business. By simultaneously targeting the beauty device and cosmetics markets, APR has created strong synergies, expanding its customer base by cross-selling devices and cosmetics.
This strategy has allowed APR to achieve significant annual growth in sales. Particularly, APR's US sales recorded triple-digit growth rates for five consecutive quarters starting from the third quarter of 2023, demonstrating remarkable global market performance.
While APR has established itself as the leader in Korea's beauty device market, many believe that international competition has yet to fully take off. Analysts suggest that there is still an opportunity to gain a first-mover advantage before the global home beauty market becomes more competitive.
There is also a view that AmorePacific has sufficient competitiveness in beauty device development, leveraging its long-standing research and technological expertise as a leading Korean beauty company.
AmorePacific has focused on market diversification to overcome sluggish performance. Efforts have particularly been made to reduce dependency on China and expand its presence in Western markets.
As a result, the company achieved triple-digit growth in operating profit in the third quarter last year, aided by the performance of its subsidiary COSRX, and significantly enhanced brand recognition in Western markets.
However, industry experts suggest that the path to full recovery remains challenging, primarily due to delays in the economic recovery of its key market, China.
Despite achieving significant profitability improvements in the third quarter of last year, AmorePacific's current performance remains below the level it achieved in 2021, when it was firmly established as Korea's leading beauty company.
According to FnGuide, a listed company analysis agency, AmorePacific's consolidated revenue for 2024 is estimated at KRW 3.8352 trillion (USD 2.766 billion), and operating profit is projected at KRW 223.3 billion (USD 161.1 million). This represents declines of 21.1% in revenue and 35.0% in operating profit compared to 2021.
An AmorePacific representative stated, "Since the launch of the MakeON brand, we have continued to release and sell new products. With the unveiling of our new product at CES, we will continue to develop innovative products in the future."
#AmorePacific #SuhKyungbae #homebeautydevices #CES2025 #MakeON #SkinLightTherapy3S #SamsungElectronics #globalexpansion #beautyinnovation #profitability
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- Han Jong-hee Unveils Samsung's 'Home AI' Vision: "Delivering Personalized Customer Experiences"
- Han Jong-hee, the Vice Chairman and CEO, as well as the head of Samsung Electronics' DX Division, unveiled the vision for "Home AI" that prioritizes understanding users and delivering joy.
On January 6 (local time), Samsung Electronics held the "Samsung Press Conference" at the Mandalay Bay Hotel in Las Vegas, ahead of the opening of CES 2025, the world’s largest electronics exhibition. The event was attended by over 1,300 participants.
Han introduced the vision for "Home AI" under the theme "AI for All: Expanding Experiences and Innovation," highlighting ultra-personalized solutions tailored to individual users.
He stated, "Samsung's 'Home AI' offers ultra-personalized experiences based on a deep understanding of users, delivering convenience and joy to their daily lives. We aim to extend Samsung’s unique 'Home AI' innovation beyond homes to industries and society, continuing our leadership in innovation for the next 100 years."
Home AI recognizes and understands various situations and patterns, including daily routines, work, and leisure activities of family members. It also utilizes spatial AI to analyze objects and spaces within a home, providing users with highly advanced solutions.
By applying the space-AI-based "SmartThings Ambient Sensing," connected devices can detect and analyze not only users' device usage patterns but also movements and surrounding sounds. This allows for summaries of household information, notifications for situations requiring action, and suggestions for device control tailored to the situation.
Samsung introduced a range of new "Home AI" products.
The "Galaxy Book5 Pro" and "Book360," featuring both "Galaxy AI" and Microsoft's "Copilot+ PC" functionality, were unveiled, offering an enhanced AI experience.
"Samsung Health," designed to help families manage their health more effectively, was also introduced.
Health metrics collected through personal wearable devices such as the Galaxy Ring and Galaxy Watch are analyzed using AI technology. This provides personalized insights on sleep and diet management, helping users take better care of their health.
Samsung also expanded and strengthened its security solution "Samsung Knox" to ensure comprehensive protection of personal data in the era of hyperconnectivity and hyper-personalization.
Using blockchain technology, the "Samsung Knox Matrix" protects homes, personal data, and interconnected devices from security threats. It has been expanded to cover not only mobile and TV devices but also all home appliances equipped with Wi-Fi.
"Samsung Knox Vault," which stores sensitive user information such as passwords and biometric data in a separate security chip for enhanced protection, is now being applied beyond mobile and TV devices to include new Family Hub appliances.
#SamsungElectronics #HanJongHee #HomeAI #CES2025 #SmartThings #GalaxyBook5Pro #SamsungHealth #SamsungKnox #AItechnology #innovation
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- Yim Jong-ryong Strengthens Grip on Woori Financial, 'One-Top Leadership' Faces New Challenges
- Yim Jong-ryong, the Chairman of Woori Financial Group, faces another test of his "one-top" leadership in the new year.
To resolve the long-standing factional conflicts perceived as a chronic issue, Woori Financial Group integrated the alumni associations of Hanil Bank and Commercial Bank. The heads of key affiliates were also filled with figures less associated with factions, potentially strengthening Chairman Yim’s organizational control.
However, as many of the appointees share connections with Yim, he now bears the responsibility to deliver substantial reforms with his increased influence.
On January 6, financial industry opinions suggested that Yim's grip on Woori Financial Group has significantly strengthened following the year-end personnel changes.
On January 3, Woori Financial Group announced the integration of the alumni associations of Hanil Bank and Commercial Bank as part of its effort to resolve factional conflicts. This marks a historic step, 26 years after the two banks merged to form Hanbit Bank in 1999. The group anticipates that the integration will lead to greater internal cohesion.
Woori Bank, rooted in the 1999 merger of Hanil Bank and Commercial Bank, has been assessed as having persistent factional conflicts between employees from the two banks. Even Chairman Yim pointed out this issue during a parliamentary audit in October 2022, describing it as a "shadow culture."
With the resolution of these conflicts, Yim’s influence over the group is expected to increase further.
Despite the merger occurring more than two decades ago, the leadership still includes figures from the pre-merger era, meaning Yim could not ignore the effects of their backgrounds. However, most of the group’s current workforce consists of employees who joined after the merger.
Factional affiliations appear to have diminished among the executives of Woori Financial Group’s three key subsidiaries.
Jin Sung-won, the new CEO of Woori Card, was appointed from outside the group, having built his career at Samsung Card, Hyundai Card, and Lotte Card. This marks the first break from the tradition of appointing former Woori Bank executives to the position.
Ki Dong-ho, a former vice president at Woori Bank, was named CEO of Woori Financial Capital. Ki, who began his career at Peace Bank rather than Hanil or Commercial Bank, is considered free from factional influences within Woori Financial Group.
At Woori Bank, Jeong Jin-wan, a Hanil Bank alumnus, was appointed CEO, continuing the alternation between Hanil and Commercial Bank alumni. However, Jeong, who joined Hanil Bank in 1995 and experienced the merger only two and a half years later, is relatively removed from factional conflicts. Jeong himself commented, “Although I am from Hanil Bank, the merger happened just two and a half years after I joined, so I’m not familiar with factional conflicts.”
Yim’s emphasis on breaking down factions and appointing individuals with whom he has connections is also noteworthy.
During his time as an economic counselor at the Korean Embassy in the UK from 2004 to 2006, Yim built relationships with Jeong Jin-wan, the new CEO of Woori Bank, and Nam Gi-cheon, CEO of Woori Investment & Securities, who was brought into Woori Financial Group after Yim’s appointment.
Yim, an economics graduate of Yonsei University, also shares ties with executives such as CFO Lee Sung-wook, Woori Financial Group’s longest-serving executive, and Kim Gun-ho, the new CEO of Woori F&I, who was promoted this year.
Sung Dae-gyu, the leader of the acquisition task force for Tongyang and ABL Life Insurance, is a former civil servant and a junior colleague of Yim’s from the civil service exam.
Some market observers speculate that the Hanil-Commercial factional dynamic might simply be replaced by a new faction aligned with Chairman Yim.
While Yim’s organizational control has increased under the pretext of resolving factional conflicts, it needs to translate into tangible reforms.
Woori Financial Group operates under Yim’s "one-top" leadership structure. Unlike other major financial groups, where vice chairmen or key subsidiary heads participate on the board, Yim is currently the only executive director on the Woori Financial Holdings board.
Yim has pledged to drive change with perseverance in the new year. In his New Year’s address, he stated, “We cannot stand still on the edge of the cliff. I fully understand that corporate culture cannot change overnight, but I will not give up and will push forward with consistency and a long-term perspective.”
#YimJongryong #WooriFinancialGroup #factionalconflict #leadership #HanilBank #CommercialBank #organizationalreform #one-topmanagement #financialindustry #Koreanbusiness
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- Cho Wook-je's Push for Global Top 50 Pharma: Leclaza's U.S. Market Success Holds the Key
- Cho Wook-je, the President and CEO of Yuhan Corporation, is nearing the deadline for his ambitious goal set in 2021 of making the company one of the world’s top 50 pharmaceutical firms by revenue.
To achieve this, Yuhan would need to more than double its 2024 revenue, with the success of Leclaza, a treatment for non-small cell lung cancer (NSCLC) now being actively sold in the U.S., playing a pivotal role in meeting this target.
According to pharmaceutical industry sources on January 6, Yuhan may take longer than anticipated to establish Leclaza’s position in the U.S. market. Johnson & Johnson (J&J), which licenses the technology for Leclaza, faced a setback in its efforts to commercialize a subcutaneous (SC) version of Rybrevant, a bispecific anti-cancer antibody used in combination therapy with Leclaza.
In December 2025, J&J received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) for the SC version of Rybrevant, delaying its planned commercialization. This impacted the rollout of the combination therapy of Rybrevant SC and Leclaza, which was intended to target the U.S. NSCLC treatment market.
Previously, in August 2024, the FDA had approved Rybrevant and Leclaza as a first-line treatment for NSCLC patients with EGFR exon 19 deletions or exon 21 L858R substitution mutations. While Leclaza is already being sold in combination with the intravenous (IV) version of Rybrevant, the delay in SC approval may prolong Leclaza’s full establishment in the U.S. market due to the greater convenience of SC formulations.
However, since the FDA has not requested additional clinical trials, industry experts estimate that addressing the FDA’s concerns and resubmitting documentation could take approximately six months.
For CEO Cho, obtaining swift FDA approval for Rybrevant SC is crucial for Leclaza’s success in the U.S. market. Leclaza is central to Yuhan’s goal of becoming a top 50 global pharmaceutical company by 2026, a target Cho announced upon his appointment in 2021.
In his New Year’s address on January 2, 2025, Cho emphasized, “This year, as we approach our 100th anniversary, we will achieve the goals set for each business unit with a strong sense of responsibility and differentiated strategies to enter the global top 50 pharmaceutical companies.”
Pharmaceutical companies in the global top 50 generate approximately KRW 4 trillion (approximately USD 2.88 billion) in annual revenue. To achieve this, Yuhan would need to nearly double its revenue in the next two years.
According to FNGuide, Yuhan is estimated to have achieved KRW 2.073 trillion (approximately USD 1.49 billion) in revenue and KRW 98.8 billion (approximately USD 71.3 million) in operating profit in 2025. This represents an 11.51% increase in revenue and a 74.07% increase in operating profit compared to 2024.
Yuhan’s 2025 business report shows that 63.7% of its revenue in the first three quarters came from its domestic pharmaceutical division. To achieve significant revenue growth, Yuhan is focusing on royalties from Leclaza’s international sales and out-licensing deals for other drug candidates.
In December 2018, Yuhan licensed Leclaza to J&J subsidiary Janssen under a deal worth up to USD 1.255 billion (approximately KRW 1.8454 trillion). Although the agreement value was later adjusted to USD 950 million (approximately KRW 1.3969 trillion) due to the termination of certain research projects, Yuhan remains eligible to receive up to USD 740 million (approximately KRW 1.088 trillion) in milestones tied to further development and sales.
With additional royalties from Leclaza’s sales, Yuhan could still achieve its goal of becoming a top 50 pharmaceutical company. J&J has projected annual revenue of at least USD 5 billion (approximately KRW 7.3535 trillion) from the combination therapy of Rybrevant SC and Leclaza. Assuming a typical royalty rate of 10–15%, Yuhan could earn USD 500–750 million (approximately KRW 720 billion–1 trillion).
If Leclaza quickly secures FDA approval for the combination therapy with Rybrevant SC, Yuhan could potentially reach KRW 4 trillion (approximately USD 2.88 billion) in annual revenue by 2026, achieving its goal of entering the global top 50 pharmaceutical companies.
An industry insider commented, “The FDA’s CRL appears to concern manufacturing facilities rather than major issues. Many global pharmaceutical companies have received similar requests during the approval process for SC formulations. It seems unlikely that the approval will fail once these concerns are addressed.”
#ChoWookje #YuhanCorporation #Leclaza #Rybrevant #pharmaceuticalindustry #FDAapproval #JohnsonAndJohnson #top50pharma #globalbusiness #pharmaceuticalgrowth
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- Hannam District 4: A Crucial Test for Samsung C&T’s Housing Expansion, Oh Se-chul Intensifies Bid Efforts
- Oh Se-chul, the President and CEO of Samsung C&T Corporation’s Construction Division, has been busy as the competition between Samsung C&T and Hyundai Engineering & Construction (Hyundai E&C) for the redevelopment project of Hannam District 4 intensifies.
As Oh focuses on expanding Samsung C&T’s housing business, particularly around the Yongsan area, the outcome of the Hannam District 4 redevelopment project could become a significant turning point for Samsung C&T.
According to construction industry insiders on January 6, the competition for Hannam District 4 has reached a fever pitch, with CEOs from both Samsung C&T and Hyundai E&C actively engaging in final pushes on the ground.
Hyundai E&C CEO Lee Han-woo was the first to visit the site, attending a joint briefing session for the project’s union members on January 4, the day after his official inauguration. He highlighted Hyundai E&C’s strengths, including its six-year streak as the top contractor in Korea’s urban redevelopment sector and its premium apartment brand, The H.
Lee stated, “We prioritize customer trust and reputation over profitability. If entrusted with this project, we will deliver the best landmark development.”
Samsung C&T was represented at the briefing by Vice President Kim Sang-kook, head of the company’s Housing Development Business Unit. However, reports suggest that CEO Oh Se-chul is also considering attending future sessions. A Samsung C&T representative stated, “No specific visit schedule has been confirmed yet, but there are two more joint briefings on January 11 and 18, so it is possible that CEO Oh will participate.”
In November 2024, after the face-off between Samsung C&T and Hyundai E&C for Hannam District 4 was confirmed, Oh personally visited the site. He encouraged his team, saying, “Let’s make Hannam District 4 a landmark and give our best to win this project.”
Hannam District 4 involves redeveloping the Bogwang-dong area in Yongsan-gu, Seoul, into 51 buildings with 2,331 apartment units. Known for its prime location and high volume of general sale units, Hannam District 4 is considered the most economically viable among the Hannam New Town redevelopment areas.
Amidst heightened uncertainty in the international construction market due to factors such as political turmoil, the U.S. Trump administration’s policies, and persistent high exchange rates, the project’s profitability and branding value have increased significantly.
Kim In-man, head of Kim In-man Real Estate Economics Research Institute, stated on YTN Radio on December 23, 2024, “High-end apartments have an inherent advertising effect without requiring TV commercials. For affluent areas like Gangnam or Yongsan, construction companies are fighting tooth and nail. Hannam District 4 is the crown jewel of Korea’s construction industry.”
The competition has garnered attention as it marks the first head-to-head battle in 17 years between Samsung C&T, ranked first in construction capability evaluation for 11 consecutive years, and Hyundai E&C, ranked first in urban redevelopment for six years. Adding intrigue, both CEOs, Oh Se-chul and Lee Han-woo, are alumni of Seoul National University’s Department of Architectural Engineering.
However, some worry that the fierce competition, driven by extraordinary offers from both companies, could reduce the project’s profitability and lead to a “winner’s curse.” Hyundai E&C proposed a construction cost of KRW 1.4855 trillion (approximately USD 1.07 billion), KRW 84 billion less than Samsung C&T’s bid of KRW 1.5695 trillion (approximately USD 1.14 billion). This is even below the union’s estimated construction cost of KRW 1.5723 trillion (approximately USD 1.14 billion).
Samsung C&T has offered to absorb up to KRW 314 billion (approximately USD 228 million) in potential cost increases due to inflation, calculated based on recent construction cost indices.
For Oh Se-chul, the outcome of the Hannam District 4 competition goes beyond profitability or pride; it is seen as a gauge of Samsung C&T’s future direction under his leadership. Oh has been strengthening the company’s housing business to counter the construction market downturn, including relaunching the Raemian brand after 14 years.
Samsung C&T is also pushing to establish a “Raemian Town” centered around Yongsan Park, with existing developments such as Raemian Chelitus to the south and Yongsan The Central to the west. In October 2024, it was selected as the contractor for the Namyeong District 2 redevelopment project north of Yongsan Park, where it plans to build Raemian Superrus.
The proposed Raemian Glow Hills Hannam for Hannam District 4 would not only mark the debut of Raemian in Hannam-dong but also complete Samsung C&T’s vision for the area.
Oh’s focus on Hannam District 4 is also due to its potential impact on securing future redevelopment projects, including Apgujeong District 3. The selection processes for key redevelopment areas in Seoul, such as Seongsu District 4 and Yeouido, are scheduled for the first half of 2025.
Apgujeong District 3, in particular, is expected to be a marquee project, with plans for a 70-story, 5,175-unit apartment complex and an estimated budget of KRW 7 trillion (approximately USD 5.1 billion). The site has drawn interest from other major players, including HDC Hyundai Development Company, alongside Samsung C&T and Hyundai E&C.
#OhSechul #SamsungC&T #HyundaiE&C #Hannam4District #redevelopment #constructioncompetition #Raemian #urbanrenewal #landmarkprojects #Koreanbusiness
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- TSMC's 2nm Price Hike: Apple, NVIDIA to Defect? Jun Young-hyun’s Samsung Foundry Eyes Opportunity
- Taiwan's TSMC has significantly raised the price of wafers for its advanced 2nm foundry process, set to begin operations in the second half of this year, by approximately 50% compared to its 3nm process. This has led to speculation that major customers such as Apple, NVIDIA, and Qualcomm may consider alternative options.
Apple, reportedly the first customer for TSMC's 2nm process, has postponed using this technology for its mobile processors (AP) by a year. NVIDIA and Qualcomm are also reportedly exploring the possibility of outsourcing some AI semiconductors and AP production to Samsung Electronics’ foundry.
This development raises the likelihood of Vice Chairman Jun Young-hyun, Head of Samsung Electronics’ Device Solutions (DS) Division, attracting major customers to the 2nm foundry process, potentially giving Samsung an opportunity to narrow the gap with TSMC.
According to semiconductor industry insiders on January 3, TSMC, which holds a dominant 60% share in the global semiconductor foundry market, has caused major customers to consider Samsung Electronics’ 2nm foundry as an alternative due to significant price increases for its 2nm process.
Citing Taiwanese media, U.S.-based IT publication WCCF Tech reported that Apple planned to use TSMC’s 2nm process for its "A19" application processor (AP) in the iPhone 17 series, set for release in Q3 2024. However, Apple recently postponed this plan by a year.
The A19 chip is now expected to be produced using TSMC’s 3nm process, while the 2nm process will likely be applied to APs for the iPhone 18 series in 2025.
Apple had reserved a significant portion of 2nm AP production with TSMC. However, the cancellation of this production could deal a substantial blow to TSMC.
In addition to Apple, other major customers are also showing signs of withdrawing from TSMC’s 2nm foundry. According to Taiwan's Commercial Times, Qualcomm and NVIDIA are reportedly discussing outsourcing some 2nm production to Samsung Electronics’ foundry.
Qualcomm is considering using Samsung’s foundry for the next-generation version of its "Snapdragon Elite" AP, while NVIDIA is evaluating outsourcing parts of its next AI semiconductor, "Rubin," to Samsung.
The primary reason for the shift is TSMC’s price increase.
TSMC has reportedly set the price of silicon wafers for its 2nm process at USD 30,000 (approximately KRW 44 million), 50% higher than the USD 20,000 per wafer for its 3nm process.
Wafers for TSMC’s 4nm and 5nm processes were priced at USD 15,000 per wafer.
A single 12-inch silicon wafer can produce 300–400 chips.
TSMC’s sharp price hike for the 2nm process is attributed to significant R&D expenses, labor costs, and production facility investments.
Additionally, yield issues (the proportion of functional chips produced) are believed to have influenced the price increase.
TSMC’s 2nm process, set to commence full operations at its Baoshan facility in Hsinchu in the second half of this year, reportedly has a yield of around 60%, below the company’s internal standards. If four out of every ten wafers need to be discarded due to defects, raising wafer prices becomes necessary to maintain profitability.
TSMC’s price hike and potential customer attrition present an opportunity for Samsung Electronics’ foundry to rebound. Having lost most major customers for its 3nm process to TSMC, Samsung’s foundry business has faced deficits but is now focusing on its 2nm process. Samsung’s global foundry market share dropped below 10% to 9.3% as of Q3 2023.
Initial reports suggest Samsung’s 2nm process yield is better than that of its 3nm process. The company is currently conducting production tests with some key customers and plans to start pilot production in the first half of 2024.
Samsung’s 2nm foundry has already secured customers such as Japan’s PFN for AI semiconductor designs and U.S.-based Ambarella for autonomous vehicle chips. If it can attract additional major customers like Apple, NVIDIA, and Qualcomm, Samsung’s foundry business could be poised for a revival.
However, Samsung will need to quickly improve its yield and offer prices lower than TSMC’s to secure these customers. The company plans to begin operating its 2nm foundry process in the second half of 2024.
#TSMC #SamsungElectronics #2nmFoundry #Apple #NVIDIA #Qualcomm #SemiconductorIndustry #WaferPricing #SemiconductorManufacturing #JunYoungHyun
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- SPC Group Laying Groundwork for Spin-Off, Heo Jin-soo’s Bold Expansion into U.S. Market
- Heo Jin-soo, CEO of Paris Croissant, is aggressively expanding globally by increasing overseas stores to 600, focusing on the North American market.
As Heo Young-in, Chairman of SPC Group, steps back from active management amid various controversies, speculation is growing about a transition to a third-generation leadership structure within the company.
There is also speculation that CEO Heo Jin-soo's expansion is not merely about increasing store numbers but may be part of a strategy to prepare for a potential spin-off of the bakery division.
Based on SPC Group’s recent activities as of January 3, the global expansion of its bakery division, led by Paris Baguette, remains the group’s top priority for this year.
SPC Group recently announced plans to establish its largest overseas baking plant in Texas, USA.
The plant will involve an investment of USD 160 million (approximately KRW 236.3 billion) and will span 150,000 square meters (approximately 45,000 pyeong), making it the largest production facility SPC operates abroad. This reflects CEO Heo Jin-soo’s strong commitment to expanding Paris Baguette’s market share in North America.
According to SPC Group, the new Texas bakery plant will serve as a supply hub for bakery products in the United States and Canada and future markets in Central and South America. This project is more than a production facility; it symbolizes CEO Heo Jin-soo’s global vision.
Since 2023, Heo Jin-soo has been accelerating store expansion, primarily in North America.
Paris Baguette began its overseas operations in 2004 and now operates over 600 stores in 11 countries, including the United States, France, the United Kingdom, and Canada.
In North America alone, there are about 200 stores—a milestone achieved in less than two years since opening its 100th North American store in New Jersey in January 2023.
SPC Group aims to use the Texas plant as a foundation to expand Paris Baguette stores in North America to 1,000 by 2030.
The group is also expanding its footprint in Southeast Asia and other regions.
Recently, SPC Group reorganized its global business structure to strengthen its overseas operations, establishing the AMEA (Asia-Pacific, Middle East, Africa) headquarters within Paris Baguette’s global division.
In October 2023, SPC Group signed agreements to enter three Southeast Asian markets: Thailand, Brunei, and Laos. Additionally, it is nearing the completion of a global halal-certified plant in Johor Bahru, Malaysia.
Some analysts suggest that CEO Heo Jin-soo’s rapid expansion of Paris Baguette’s global presence is part of a broader strategy to divide the group’s businesses between him and his younger brother, Heo Hee-soo, Vice President of SPC Group.
Amid Chairman Heo Young-in’s recent withdrawal from the management forefront due to controversies, industry insiders speculate that SPC Group is preparing for a third-generation leadership transition.
In this context, Heo Jin-soo’s focus on SPC Group’s core bakery business could be a prelude to a division of businesses between the siblings.
Industry experts predict that the spin-off could see CEO Heo Jin-soo leading the bakery businesses, including Paris Croissant and SPC Samlip, while Vice President Heo Hee-soo takes charge of the foodservice businesses, such as BR Korea, and IT subsidiary Sectenine.
The basis for this speculation lies in the group’s shareholding structure. CEO Heo Jin-soo holds relatively stronger control over the bakery division.
As of December 31, 2023, Heo Jin-soo was the second-largest shareholder of Paris Croissant, SPC Group’s de facto holding company, with a 20.33% stake, while Heo Hee-soo was the third-largest shareholder with 12.82%.
A similar trend appears in SPC Samlip, the group’s only listed company. As of September 30, 2024, Paris Croissant held a 40.66% stake in SPC Samlip, while Heo Jin-soo and Heo Hee-soo owned 16.31% and 11.94%, respectively.
The relocation of some SPC Group affiliates also adds weight to the spin-off theory.
In 2023, BR Korea’s Baskin-Robbins division and Sectenine moved from the group’s main office in Yangjae-dong, Seoul, to the new SPC 2023 building in Dogok-dong, Seoul.
Vice President Heo Hee-soo, who heads BR Korea and Sectenine, has essentially separated his business divisions physically from the group’s headquarters.
SPC Group is known for not adhering strictly to the principle of primogeniture. This suggests the possibility of CEO Heo Jin-soo and Vice President Heo Hee-soo establishing independent management systems through a spin-off.
This approach aligns with the precedent set by the group’s late founder, Honorary Chairman Heo Chang-sung, who divided Samlip Foods and Shany between his sons Heo Young-sun and Heo Young-in.
Currently, Chairman Heo Young-in owns over 60% of Paris Croissant. The sibling management structure will become clearer depending on how this stake is transferred. However, no official announcement has been made regarding the succession plan or the spin-off direction.
#HeoJinSoo #ParisBaguette #SPCGroup #GlobalExpansion #BakeryBusiness #HeoHeeSoo #TexasBakeryPlant #BusinessSpinOff #NorthAmericaMarket #ThirdGenerationLeadership