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- Jung Won-ju Calls for PF Normalization Measures: "Effective Liquidity Support, Abolition of Loan Limits"
- Jung Won-ju, Chairman of the Korea Housing Builders Association, emphasized the urgent need for government support to normalize project financing (PF).
In his 2025 New Year’s address, Jung stated, “As a member of the housing construction industry, I do not feel entirely joyful about entering 2025. This is because the housing market outlook is far from a hopeful blueprint,” he said on the 30th.
Jung identified factors negatively affecting the housing market, including domestic economic concerns related to the political turmoil surrounding the presidential impeachment, prolonged global economic uncertainty due to the Russia-Ukraine and Middle East wars, rising raw material prices, and household debt issues.
He appealed for institutional support to stabilize the industry, given the significant role of the housing sector in the domestic economy.
Jung said, “The housing industry has a profound impact not only on the livelihoods of working-class households and the overall national economy but also on related industries and employment. Its influence surpasses that of other sectors. Government policy support is urgently needed to normalize the industry so it can play a pivotal role in economic growth.”
He stressed the urgency of normalizing real estate PF, which has become a ticking time bomb in the housing industry, calling for regulatory easing and other measures.
Jung stated, “Effective liquidity support measures for housing developers, such as emergency support for real estate PF normalization, are necessary. Additionally, measures to revitalize the non-apartment market, promote private construction rental housing supply, implement follow-up actions for mandatory integrated reviews under the Housing Act, and alleviate burdens of land contributions are needed.”
For PF normalization, Jung prioritized differentiated application of risk weights for equity capital ratios and suspension of reserve regulations for mutual finance institutions.
Low equity capital ratios are identified as a major issue in domestic PF projects.
In Korea, the equity capital ratio for PF loans is around 5%, except for savings banks, which require a 20% equity ratio. This is significantly lower compared to over 30% in countries like the U.S. and Japan.
In other countries, developers attract equity investors, such as financial institutions or pension funds, to secure 30-40% equity for land purchases before obtaining PF loans during the construction phase. This allows for a more stable structure that includes both rental and sales income.
In contrast, in Korea, developers often pursue short-term gains, using around 5% equity to purchase land with high-interest loans (bridge loans) at the outset, leading to structural instability.
In response, the government announced on November 14 a “Real Estate PF System Improvement Plan,” which includes a medium- to long-term strategy to raise the equity capital ratio to 20%. The plan incorporates policies such as differentiated risk weights for equity capital ratios.
Specifically, the government aims to encourage land and building contributions from landowners instead of high-interest loans for land purchases. Policies will differentiate risk weights and reserves based on the equity capital ratio in PF projects.
Jung also emphasized the importance of measures such as increasing floor area ratios for urban housing supply, improving misuse of discretionary power by local governments, and updating basic construction cost estimates.
On the demand side, he stressed the need for “pinpoint policies.”
Jung stated, “It is urgent to immediately abolish the total loan limit system, which leads to loan suspensions, implement preferential loan rates for housing support groups and homes below the national housing size, and provide tax benefits for unsold housing buyers. Special measures are also urgently needed to support smooth financing for housing companies in regional areas, where unsold housing is a severe issue.”
The association also announced plans to enhance communication with the government for housing industry revitalization and to focus on overseas projects and ESG (environmental, social, governance) management.
Jung added, “In 2025, our association will concentrate its efforts on implementing proactive housing policies to enable member companies to focus on housing projects comfortably. We will closely communicate with government authorities to devise activation measures and energetically pursue our core tasks.”
He continued, “To respond actively to the rapidly changing domestic and international housing market, we will support members’ participation in overseas housing projects by operating an ‘Overseas Housing Business Exploration Team.’ We will also prioritize ESG management through social contribution activities. I hope the year 2025, the Year of the Blue Dragon, brings new opportunities for the housing construction industry.”
The Korea Housing Builders Association was established in 1985 to improve national housing standards and advance the housing industry. It currently has about 10,000 member companies.
Jung was elected as the 13th chairman of the Korea Housing Builders Association in December 2022 for a three-year term. Since June last year, he has also served as Chairman of Daewoo E&C.
#JungWonju #KoreaHousingBuildersAssociation #projectfinancing #housingmarket #governmentpolicy #realestatePF #economicgrowth #ESGmanagement #housingindustry #DaewooEandC
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- "Alibaba Deal" Chung Yong-jin and "1 Trillion Duty-Free Goal" Chung Yoo-kyung, Key to Shinsegae's Split
- Chung Yong-jin, Chairman of Shinsegae Group, and Chung Yoo-kyung, Chairwoman of Shinsegae, appear to be exploring independent survival strategies following the group’s planned business split.
Chairman Chung Yong-jin is partnering with Alibaba International, the operator of China's e-commerce platform AliExpress, to enhance competitiveness in the domestic e-commerce market. Chairwoman Chung Yoo-kyung has set a goal to increase annual revenue from duty-free stores by more than KRW 1 trillion (approximately USD 720 million) within six years.
Given that Shinsegae Group has already formalized its business split, the decisions of the two siblings are significant. Analysts suggest that E-Mart and Shinsegae, which will operate independently in the future, are actively seeking new growth opportunities.
On the 30th, industry sources suggested that the recent decisions by Chairman Chung Yong-jin and Chairwoman Chung Yoo-kyung reflect the need to establish independent revenue sources ahead of the group's split.
On the 27th, Shinsegae unveiled its “Value-Up” corporate value enhancement plan. Notably, Shinsegae Duty-Free, which recorded revenue of KRW 1.869 trillion (approximately USD 1.35 billion) last year, aims to increase revenue to KRW 2.4 trillion (approximately USD 1.73 billion) by 2027 and KRW 3 trillion (approximately USD 2.17 billion) by 2030.
Shinsegae has set an annual average growth rate (CAGR) target of 6.8% until 2030. However, given the current challenges in the duty-free industry, this target appears ambitious.
In reality, Shinsegae Duty-Free’s revenue fell to KRW 3.3668 trillion (approximately USD 2.43 billion) in 2022, a 44.5% drop from the previous year. As of the third quarter of this year, cumulative revenue increased by only 1.3% compared to the same period last year, far from achieving Chairwoman Chung’s 6.8% growth target.
The aggressive revenue target set for Shinsegae Duty-Free reflects Chairwoman Chung’s urgency. With little time left before the group’s split, there is a recognized need to sufficiently expand Shinsegae’s business size to ensure its survival.
Given that Shinsegae Group formalized the split by granting Chairwoman Chung her title during this year’s executive appointments, the pressure to produce results quickly is likely significant.
Shinsegae Group currently derives two-thirds of its revenue from the E-Mart division. Once the split occurs, Shinsegae’s position in the business rankings could drop significantly.
Chairwoman Chung’s target is considered challenging. Some industry observers note that Shinsegae’s plans lack groundbreaking measures to boost duty-free revenue. The group plans to attract customers through new duty-free store openings and renovations, such as the grand opening of its Incheon Airport store next year and the re-opening of its Myeongdong store in 2026.
Critics argue that consumer behavior has shifted away from heavy use of duty-free stores while traveling, contributing to declining revenue in the industry. Many question whether Chairwoman Chung’s targets are overly optimistic.
Various interpretations also surround Chairman Chung Yong-jin’s decision to collaborate with Alibaba International.
Chairman Chung’s move is seen as an attempt to disrupt the e-commerce market by partnering with Alibaba International. After efforts to dominate the market through SSG.com and Gmarket largely failed, this collaboration seems aimed at creating a turnaround.
However, skepticism remains about whether Gmarket and AliExpress can generate meaningful synergy. According to the distribution industry, AliExpress holds about a 1% market share in Korea’s e-commerce market, while Gmarket has about 8%. Combining their shares would increase Gmarket’s market share by only 1%.
Shinsegae Group expects Gmarket sellers to expand their reach globally through AliExpress. However, Coupang already allows its sellers to sell products in Taiwan, and AliExpress launched its global sales program in September this year.
Korea Investment & Securities noted, “While securing a strategic partner for Gmarket is a positive step, it is difficult to predict synergy from a joint venture at this stage. The announced strategy alone is unlikely to have a significant impact on the online market.”
With the E-Mart division’s growth slowing, largely due to its reliance on hypermarket operations, Chairman Chung seems determined to find a breakthrough in the e-commerce market. However, doubts persist over the appropriateness of his strategy.
Chairman Chung must deliver results, albeit for slightly different reasons than Chairwoman Chung. Many of his past investments, including the acquisition of Gmarket, have had disappointing outcomes. E-Mart purchased Gmarket in 2021 for KRW 3.4404 trillion (approximately USD 2.5 billion), making it Shinsegae Group’s largest-ever acquisition.
Given the scale of the investment, Gmarket is seen as a critical affiliate for Chairman Chung to revitalize. To date, Gmarket has posted only one quarterly profit, in the fourth quarter of last year, while the rest have been operating losses.
Chairman Chung’s decision to collaborate with Alibaba International is attracting significant attention. It is considered a crucial step for demonstrating his managerial acumen as the head of the group.
#ShinsegaeGroup #ChungYongjin #ChungYookyung #ecommerce #AliExpress #Gmarket #dutyfree #corporatesplit #businessstrategy #Koreanbusiness
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- Jeju Air's Kim E-bae: "Top Priority on Accident Recovery and Family Support, Cause Still Unclear"
- Kim E-bae, CEO of Jeju Air, apologized for the passenger aircraft accident at Muan Airport and promised to do his utmost to handle the aftermath.
At a briefing held at Mayfield Hotel in Gangseo-gu, Seoul, on the 29th, Kim said, “I extend my deepest condolences and apologies to the passengers who lost their lives and their bereaved families. As the CEO, I take full responsibility for this accident.”
He added, “Jeju Air will do everything possible to promptly manage the situation and support the families of the passengers.”
Regarding the cause of the accident, he stated, “At this point, it is difficult to determine the cause, and we need to wait for the official investigation results from the government authorities. We will work with the government to uncover the cause of the accident.”
When asked by reporters about the cause, Kim reiterated, “There will be an official investigation by the government, and I have no further comment to add.”
After the incident, Kim convened an emergency meeting at Jeju Air’s office at the Aviation Support Center in Gangseo-gu, Seoul, to discuss response measures.
At around 9:03 a.m. on the same day, Jeju Air flight 7C2216, operating the Bangkok-Muan route, collided with the outer wall of the runway while landing at Muan International Airport.
The collision caused the aircraft to catch fire. The aircraft was almost entirely destroyed by the fire, leaving only the tail section recognizable.
The aircraft reportedly had a total of 181 people on board, including 175 passengers—173 South Koreans and 2 Thais—and 6 crew members.
A total of 179 people lost their lives in the accident, and the exact cause is currently under investigation.
#JejuAir #KimEbae #MuanAirport #aircraftaccident #aviationnews #passengersafety #emergencyresponse #airlines #accidentinvestigation #condolences
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- Yang Jong-hee Restructures KB Financial Leadership, Lee Jae-keun and Lee Chang-kwon Take the Lead
- Yang Jong-hee, Chairman of KB Financial Group, emphasized reform by replacing five of the six vice presidents whose terms had ended in the holding company’s executive appointments.
However, Lee Jae-keun, President of KB Kookmin Bank, and Lee Chang-kwon, President of KB Kookmin Card, were brought back to the holding company to serve as the control tower and maintain stability.
Yang granted them newly created "C-level" titles as division heads, strengthening their leadership in a dual system.
According to KB Financial on December 27, Lee Jae-keun and Lee Chang-kwon will begin their terms as head of the Global Division and head of the Digital and IT Division, respectively, on January 1, 2025.
After eliminating the vice chairman position last year, KB Financial had reorganized its vice president roles to oversee six core areas: strategy, finance, risk management, global business, digital and IT, and consumer protection/compliance.
With the return of Lee Jae-keun and Lee Chang-kwon to the holding company as division heads, the organizational structure has been adjusted.
Both leaders, having held various key roles within the group and leading core affiliates, are recognized for their management skills.
By entrusting them with group-wide priorities such as global business and digital transformation, this reshuffle is seen as a strategic move with future leadership in mind.
Their career paths are drawing comparisons to those of former Vice Chairmen Huh In and Lee Dong-chul, who competed with Yang for the KB Financial chairman position.
Huh served as President of KB Kookmin Bank for four years before becoming vice chairman, and Lee previously led KB Kookmin Card.
Yang also earned recognition for his management skills as CEO of KB Insurance before becoming the first vice chairman in 2021, establishing himself early as a candidate for leadership.
Lee Jae-keun led KB Kookmin Bank for three years, overseeing the group’s overseas business, including Indonesia’s KB Bank (formerly Bukopin Bank).
His understanding of global operations makes him well-suited to lead the Global Division and drive the normalization of KB Bank’s overseas ventures.
Lee Chang-kwon will oversee the Digital and IT Division, which was previously led by an external hire.
With KB Financial focusing on strengthening its digital finance capabilities, his deep understanding of the group makes him a strong candidate to serve as a control tower.
The group is currently working on building a "Group-Wide Generative AI Platform" involving all affiliates, slated for launch next year.
Under the "dual leadership" of Lee Jae-keun and Lee Chang-kwon, Yang has also introduced changes by appointing executives from non-banking affiliates to strategic roles in the holding company.
Park Young-jun, the new Executive Vice President for Strategy, previously served as Head of the Strategic Management Division at KB Asset Management.
Eom Hong-sun, appointed as Executive Vice President for Risk Management, was formerly Head of Risk Management at KB Securities, another non-banking affiliate.
By breaking the tradition of predominantly appointing executives from KB Kookmin Bank to key roles, KB Financial is maintaining its emphasis on collaboration and synergy between banking and non-banking units.
In addition, Na Sang-rok, Head of Financial Planning at the holding company, will take over the finance role previously held by Kim Jae-kwan, a candidate for KB Kookmin Card CEO.
Im Dae-hwan, the Compliance Officer whose term runs through December 2025, was the only vice president retained in this reshuffle.
In a press release regarding its organizational restructuring and executive appointments, KB Financial stated, “With the domestic economy slowing and challenges such as high exchange rates, we face a difficult management environment. The appointments of Lee Jae-keun and Lee Chang-kwon aim to leverage the management expertise proven during their affiliate leadership to maintain continuity in key group businesses.”
#YangJongHee #KBFinancialGroup #LeeJaeKeun #LeeChangKwon #ExecutiveAppointments #DigitalTransformation #GlobalBusiness #FinancialLeadership #Banking #SouthKorea
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- Hwang Byung-woo of DGB Financial Makes Bold Moves, Challenges "Big 4" in Finance
- Hwang Byung-woo, the Chairman and CEO of DGB Financial Group, has implemented a bold reshuffling of executive appointments, breaking away from traditional practices by recruiting external personnel for key positions in the holding company and its banking subsidiaries for the first time.
This personnel reshuffle is significant as it marks the first large-scale group-level appointments since Hwang took office as chairman of DGB Financial Group in March.
With iM Bank launching as a commercial bank, Hwang appears to be focusing on elevating the group to a major financial group by actively recruiting external professionals, including those from the four major financial groups, leveraging their expertise.
According to industry sources on December 27, the recent executive appointments at DGB Financial Group and its affiliates have been evaluated as emphasizing "external recruitment."
The Group Executive Appointment Committee and the Board of Directors of DGB Financial Group recommended Park Kyung-won, current Vice President of Shinhan Life, as CEO candidate for iM Life, and Kim Sung-wook, current Executive Director of Woori Financial Capital, as CEO candidate for iM Capital.
Both nominees, born in 1972, are contemporaries currently serving in key roles within the four major financial groups, which is considered a groundbreaking move.
Park Kyung-won, the nominee for iM Life CEO, is recognized as a "finance expert" with experience as Vice President of the Financial Group at Shinhan Life.
He is believed to have been tasked with addressing the significant deterioration in iM Life's financial soundness this year.
The solvency ratio (K-ICS) of iM Life, a key financial stability indicator for insurance companies, stood at 192.6% at the end of June after transitional measures, marking a decline of approximately 54 percentage points compared to the end of the previous year.
Kim Sung-wook, the nominee for iM Capital CEO, comes from Woori Financial Capital and is regarded in the industry as a "loan expert."
He is expected to address the challenges faced by iM Capital, whose cumulative net profit for the third quarter declined by 48% year-on-year due to provisions for real estate project financing (PF).
DGB Financial has not only placed external experts in affiliate companies but also in the holding company and iM Bank executives.
Notably, external talents were recruited for the first time in the digital marketing division of the holding company and the digital and information and communication technology (ICT) sectors of the bank.
Hwang Won-cheol, the new Managing Director overseeing Digital Marketing at DGB Financial Group, is known as a digital finance expert who led digital financial initiatives at Woori Financial Group.
Sung Hyun-tak, Managing Director of the ICT Group at iM Bank, previously served as the head of the Real Estate Business Division at KB Kookmin Bank and led business platform development at Naver, establishing his reputation as a digital expert.
Both Hwang Won-cheol and Sung Hyun-tak are expected to enhance the execution of the group's digital strategy due to their expertise in digital finance.
DGB Financial has identified its core value as a "New Hybrid Banking Group," aiming to combine the strengths of internet banks, regional banks, and commercial banks, making digital capabilities crucial to achieving this vision.
Hwang’s personnel policy of actively discovering outstanding external talent has continued.
Since becoming chairman of DGB Financial, Hwang has made bold moves in talent acquisition, such as recruiting Park Byung-soo, a former Financial Supervisory Service official, as the group's Chief Risk Officer (CRO) in his first executive appointments.
In July, when iM Bank opened its first overseas branch in Wonju, the group also recruited external experts familiar with the local environment, appointing Jung Byung-hoon, former Head of Gangwon Sales Division at NH NongHyup Bank, as the inaugural branch manager and regional head for Gangwon Province.
In November, the group appointed external professionals, rather than internal personnel, as heads of the holding company’s management and HR departments. This move to place external personnel in charge of divisions overseeing the group’s internal affairs was considered unprecedented in the financial sector.
Regarding the latest personnel announcement, Hwang stated, "At this critical time for establishing DGB Financial as a successful commercial financial group and ensuring its sustainable growth, we have embraced change and innovation by appointing individuals capable of leading generational transitions. We actively recruited external experts as executives of the holding company and CEOs of subsidiaries."
#HwangByungWoo #DGBFinancialGroup #iMBank #externalrecruitment #financialgroup #digitalfinance #personnelreshuffle #financialinnovation #SouthKorea #banking
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- Choi Sang-mok’s Challenge: Will He Work with the Opposition for Economic Stability?
- The Democratic Party of Korea has moved to impeach Acting President and Prime Minister Han Duck-soo, paving the way for Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok to take over as acting president.
Choi, who has been focused on his role as the economic control tower, now faces additional responsibilities, including addressing political and security issues, which significantly increase his burden.
For Choi to effectively fulfill his role as the economic leader and overcome economic uncertainties, cooperation with the Democratic Party, which holds a significant majority in the National Assembly, is essential.
This raises questions about whether Choi will adopt a different approach from Han Duck-soo by working with the opposition on key political issues, such as appointing constitutional court justices, to reduce conflict.
On December 27, Democratic Party leader Lee Jae-myung announced during an emergency statement in the National Assembly concerning a state of insurrection, “The Democratic Party will impeach Prime Minister Han Duck-soo today, following the people's mandate.”
The impeachment motion for Acting President Han Duck-soo is set to be voted on during the National Assembly’s plenary session at 3 PM. If at least 151 votes are cast in favor, Han’s duties will be suspended.
According to Article 71 of the Constitution, the order of succession for acting presidents is determined by law. Thus, Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok will succeed Han as acting president.
Given that the Democratic Party’s reason for impeaching Han is his decision to withhold the appointment of a constitutional court justice, attention is focused on how Choi will handle political controversies as acting president while responding to the Democratic Party's stance.
If Choi, like Han, delays the appointment of constitutional court justices, the Democratic Party is likely to quickly initiate impeachment proceedings against him as well.
During an interview on CBS Radio's "Kim Hyun-jung’s News Show" on December 27, Democratic Party floor leader Park Sung-joon emphasized, “The people’s mandate is to severely punish and root out the leaders and forces of rebellion,” signaling the possibility of impeaching Choi if he mirrors Han’s approach.
However, some within the Democratic Party expect Choi to avoid political confrontation and not attempt to delay investigations into President Yoon Suk-yeol’s impeachment trial or charges of insurrection.
On December 25, Democratic Party lawmaker Park Beom-gye stated on SBS Radio's "Kim Tae-hyun’s Politics Show," “Choi was the first to strongly oppose martial law during a cabinet meeting and walked out. He also showed a willingness to implement the budget cuts that were passed. In these aspects, he seems better than Han.”
Furthermore, Choi’s need to cooperate with the Democratic Party is significant for overcoming economic uncertainties.
Choi has been preparing measures such as early execution of the 2025 budget and economic policy directions to combat the economic crisis. For these plans to be implemented effectively, collaboration with the Democratic Party is crucial.
During an emergency briefing at the Sejong Government Complex on the same day, Choi, along with other cabinet members, emphasized the importance of economic stability, stating, “Our economy and people’s livelihoods are walking on thin ice amidst a national emergency. Expanding political uncertainty with an ‘acting authority for the acting authority’ is something the economy cannot afford.”
Woo Seok-jin, a professor of economics at Myongji University, analyzed on MBC Radio’s “Kim Jong-bae’s Focus” that cooperation with the National Assembly, as the representative of the people, is critical for the government’s economic policy plans to be effective.
Choi, a career economic bureaucrat, has traditionally avoided political conflicts. This characteristic is seen as a key factor differentiating him from Han Duck-soo and suggesting he may take a different approach, especially regarding the appointment of constitutional court justices.
Choi had previously submitted a document to investigative authorities regarding measures taken during the December 3 martial law by President Yoon Suk-yeol, which reportedly contained plans to secure fiscal resources for martial law-related contingencies.
During a National Assembly inquiry on December 17, Choi stated, “The deputy secretary reminded me of the document’s existence, but I decided to disregard it and shelved it.”
In past crises, such as the 2017 Park Geun-hye administration’s corruption scandal, Choi showed a willingness to cooperate with investigations and trials rather than taking a strong political stance.
As economic and financial secretary at the Blue House in 2014, Choi cooperated with special investigations and appeared as a witness during the National Assembly hearings on the scandal involving the Mir Foundation.
Political commentator Kim Sang-il stated on MBN Newswide on December 26, “Choi is a traditional bureaucrat who faced hardships during the Choi Soon-sil scandal for refusing to comply with certain orders, including missing opportunities for promotion. He understands the importance of prioritizing critical matters in the current situation.”
During an emergency macroeconomic and financial briefing earlier in the day, Choi stated, “The impeachment motion against Acting President Han has significantly increased uncertainty. Quickly resolving internal and external concerns about possible governance interruptions is crucial for stabilizing financial markets.”
These remarks reinforce the belief that Choi is unlikely to engage in direct confrontation with the opposition.
#ChoiSangMok #HanDuckSoo #DemocraticParty #impeachment #SouthKorea #economicleadership #financialstability #politicaluncertainty #YoonSukYeol #economicpolicy
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- HD Hyundai Infracore Backs Large Engines as Cho Young-cheul Rides the Wave of Defense Demand
- Cho Young-cheul, CEO of HD Hyundai Infracore, is focusing on strengthening the defense and power-generation large engine businesses to diversify the company’s performance and secure future growth drivers.
The large engine business is expected to drive HD Hyundai Infracore’s performance growth, supported by the expansion of South Korea’s defense exports and eco-friendly trends such as emission regulations.
On December 26, HD Hyundai Infracore signed an "Investment Agreement for Engine and Battery Pack Manufacturing Facilities" and announced a four-year investment of KRW 116.8 billion (approximately USD 84.3 million) to establish these facilities on a 19,000-pyeong (approximately 62,700-square-meter) site at its Gunsan plant.
This investment, the largest since HD Hyundai Infracore became part of HD Hyundai, will add engine and battery pack production facilities to the Gunsan plant, which currently focuses solely on construction equipment.
The Gunsan plant will be capable of producing 120 military engines for tanks, up to 1,250 extra-large engines with a capacity of up to 3 MW for power generation, and 880 MWh of battery packs for 3,000 electric buses annually.
This bold investment decision by HD Hyundai Infracore is expected to stimulate the local economy. Shin Young-dae, a member of the National Assembly from the Democratic Party representing Gunsan-si, Kimje-si, and Buan-gun, publicly welcomed the decision.
On December 26, he said, "We anticipate new growth industries for Korea driven by HD Hyundai Infracore's capabilities and Gunsan's industrial infrastructure. We will work to establish Gunsan as a leading city for manufacturing in Korea."
Cho’s emphasis on expanding large engine production capacity appears to be a strategic move to meet the growing demand for engines used in tanks amid the expansion of South Korea’s defense exports.
According to HD Hyundai Infracore’s third-quarter performance report, the company signed two export contracts for tank engines. These include a KRW 183 billion (approximately USD 132.0 million) contract to supply engines for K2 tanks produced by Hyundai Rotem for export to Poland, and a KRW 110.2 billion (approximately USD 79.4 million) contract to supply next-generation tank engines to BMC of Türkiye.
HD Hyundai Infracore plans to use its Gunsan plant to fulfill existing tank engine orders for Poland and Türkiye while also preparing for additional defense engine orders. For small- and medium-sized engines and battery packs, the company will invest KRW 24.4 billion (approximately USD 17.6 million) to expand dedicated facilities at its Incheon plant.
A representative of HD Hyundai Infracore stated, “We have diversified our product portfolio with small- and medium-sized engines produced at our Incheon plant and large engines manufactured in Gunsan.”
HD Hyundai Infracore expects to begin mass production of K2 tank engines, extra-large power generation engines, and commercial and industrial battery packs as early as the second half of 2026. The company anticipates annual revenue growth of more than KRW 400 billion (approximately USD 289 million) by 2035.
Co-CEO Oh Seung-hyun of HD Hyundai Infracore commented on the Gunsan investment decision, stating, "This decision aims to diversify the profit structure of the engine division and secure future growth engines. We expect cumulative revenue of more than KRW 4.5 trillion (approximately USD 3.25 billion) over the next decade."
Cho also appears to be targeting new demand for power-generation large engines driven by emission regulations in advanced markets like the United States and Europe.
HD Hyundai Infracore is reportedly focusing its research on technology that addresses emission and fuel efficiency regulations in the power-generation large engine sector.
Specific tasks include developing engines that meet European emission standards, predicting the performance and lifespan of engine wear parts for expanded applications, and creating eco-friendly diesel/gas engines for industrial and commercial vehicles to expand product lineups and enter new markets.
Cho plans to further strengthen the company’s product lineup and expand its customer base in the U.S. and European markets. In April, HD Hyundai Infracore participated in "Intermat 2024" in Paris, France, where it showcased its "HYUNDAI" engine booth featuring next-generation eco-friendly power products such as electric battery packs and hydrogen engines.
The company announced plans to begin demonstration operations of hydrogen engines for power generation in the second half of 2024 and to expand its lineup to include engines of 22 liters or larger.
At Intermat, Cho stated, "This event showcases next-generation engine technologies aimed at building a better world. We will continue to focus on developing innovative power solutions for a sustainable future."
Cho’s emphasis on the engine business stems from the construction equipment division, which was once the company’s core business, facing declining profitability. Meanwhile, the engine division’s performance and profitability have been rapidly improving.
The engine division’s operating profit rose from KRW 48 billion (approximately USD 34.6 million) in 2021 to KRW 126 billion (approximately USD 90.9 million) in 2022, and KRW 152 billion (approximately USD 109.6 million) in 2023. Operating profit for this year is expected to reach KRW 181 billion (approximately USD 130.5 million).
In Q1 2024, the engine division recorded sales of KRW 309.3 billion (approximately USD 222.9 million) and an operating profit of KRW 47 billion (approximately USD 33.9 million), surpassing the operating profit of the construction equipment division, which posted sales of KRW 848.1 billion (approximately USD 611.7 million) and an operating profit of KRW 45.8 billion (approximately USD 33.0 million) during the same period.
The securities industry has also highlighted the engine division as a key driver of HD Hyundai Infracore’s growth and profitability improvements.
Jang Yoon-seok, an analyst at Yuanta Securities, commented, “The engine division, which is being applied across various sectors such as power generation, defense, and marine, recorded a compound annual growth rate of 13% in sales and 15% in operating profit from 2016 to 2023. Defense engines for more than 1,000 K2 tanks to be supplied to Poland by Hyundai Rotem are expected to significantly contribute to the division’s consolidated performance, with each engine priced at around KRW 1 billion (approximately USD 721,000).”
#HDHyundaiInfracore #ChoYoungCheul #Engines #DefenseIndustry #PowerGeneration #ConstructionEquipment #Investment #GunsanPlant #EcoFriendly #GlobalMarkets
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- Coupang's Strategy Secures Loyal Customers, Poised to Retain 'E-commerce No. 1' Next Year
- Coupang is expected to solidify its dominance in the e-commerce market and begin a phase of unrivaled leadership next year.
There were concerns that the growth of Coupang might be hindered by the increasing presence of Chinese e-commerce platforms in Korea. However, Coupang demonstrated unwavering performance in membership numbers and usage rates this year.
First-generation e-commerce platforms such as 11st and Gmarket, as well as aggressive competition from Chinese firms, have so far failed to check Coupang's momentum.
On December 26, experts in the retail industry projected that Coupang's market share in the e-commerce sector would expand even further in 2025.
Coupang posted sales of $7.866 billion (approximately KRW 10.69 trillion) and an operating profit of $109 million (approximately KRW 148.1 billion) in the third quarter of this year, representing year-over-year growth of 27% in sales and 29% in operating profit.
Annual revenue for this year is expected to surpass KRW 40 trillion (approximately $28.87 billion) for the first time in the company's history, with operating profit anticipated to remain in the black for the second consecutive year.
Given these results, some argue that it is natural to conclude that there are no competitors to Coupang in Korea’s e-commerce industry.
In April, Coupang decided to increase the subscription fee for its paid membership service, "Wow Membership," by more than 50%, sparking predictions that there would be a surge in "Talpangjok" (customers leaving Coupang).
This was especially expected to accelerate starting in August when the price hike applied to existing members.
Contrary to expectations, however, Coupang’s user base actually grew. In the third quarter of this year, Coupang’s Product Commerce segment, which includes Rocket Delivery, Rocket Fresh, Marketplace, and Rocket Growth, reported an active customer base of 22.5 million, up 11% from the same period last year.
The average spending per customer per quarter also increased by 7.5%, from KRW 400,000 (approximately $289) in Q3 last year to KRW 430,000 (approximately $310) this year.
Industry insiders attribute this result to Coupang’s strong lock-in effect, as customers have become accustomed to its fast delivery and convenient return/exchange systems. The proportion of loyal customers has significantly increased, further strengthening Coupang’s competitive edge.
Coupang’s logistics system is also considered the largest and most advanced in Korea.
CJ Logistics, once the undisputed leader in the parcel delivery industry, has reportedly lost the top spot to Coupang’s logistics subsidiary, Coupang Logistics Services.
According to Meritz Securities, as of Q2 this year, Coupang held a market share of 36.3%, significantly ahead of CJ Logistics at 28.3%.
Since introducing Rocket Delivery in 2014, Coupang has invested approximately KRW 6.2 trillion (approximately $4.48 billion) in building its logistics infrastructure, creating a system capable of delivering 365 days a year.
Currently, Coupang operates more than 100 logistics centers nationwide, some of which are equipped with cutting-edge artificial intelligence (AI) technology to maximize delivery efficiency. The company also plans to expand Rocket Delivery to 230 cities and counties across Korea by 2027.
While Coupang surges ahead, competitors have not been idle. However, they appear to have failed to close the gap with Coupang.
11st and Gmarket have entered cost-cutting modes amid continued profitability challenges.
11st has implemented voluntary retirement programs and relocated its headquarters to reduce costs, transitioning to sole leadership under CEO An Jeong-eun.
Gmarket has also appointed a new CEO this year and introduced its first-ever voluntary retirement program, among other efforts to address its difficulties.
Chinese e-commerce platforms dubbed “Al-Tem-Shee” (AliExpress, Temu, Shein), which were expected to make waves in the Korean market earlier this year, have also failed to significantly narrow the gap with Coupang.
According to Mobile Index, a retail analysis service, Coupang recorded a dominant monthly active user (MAU) count of 32.2 million in November 2024, followed by AliExpress with 9.68 million, 11st with 8.89 million, Temu with 7.73 million, and Gmarket with 5.62 million. AliExpress’s MAU remains only about one-third of Coupang’s.
In terms of card payment market share, Coupang is also unrivaled.
According to Mobile Index, Coupang accounted for 53.8% of card payment transactions among major online shopping platforms in November. Gmarket followed with 7.9%, 11st with 7.4%, and SSG.com with 5.1%. AliExpress and Temu accounted for just 3.4% and 0.7%, respectively.
Analysts note that the frequency of purchases on Chinese e-commerce platforms like AliExpress remains relatively low compared to Coupang.
Most purchases are one-time transactions for low-cost items, resulting in a much lower average transaction value compared to Coupang.
Coupang’s position is also expected to strengthen in attracting sellers to its platform.
Following the struggles of platforms like TMON and Wemakeprice, many sellers now view Coupang as one of the best alternatives. On seller community platforms, it is common to see comments such as "I’ve already listed my products on Coupang" or "I’m considering joining Coupang."
An industry insider commented, "This year, the e-commerce sector faced extreme uncertainty due to incidents like the TMON crisis and political issues. Starting next year, each company is expected to prepare thoroughly and adopt various strategies to strengthen competitiveness."
#Coupang #Ecommerce #RocketDelivery #Logistics #MarketDominance #ChinaEcommerce #CoupangWowMembership #RetailCompetition #KoreaEcommerce #CoupangGrowth
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- Kakao Games’ 'POE 2' and 'Odin' Drive Year-End Success, Will Han Sang-woo Kickstart a Turnaround Next Year?
- Han Sang-woo, the CEO of Kakao Games, is smiling for the first time in a while as the company’s new PC online action role-playing game (RPG), 'Path of Exile 2' (hereafter 'POE 2'), has achieved early success.
Additionally, existing games such as 'Odin: Valhalla Rising' (hereafter 'Odin') and 'Uma Musume Pretty Derby' (hereafter 'Uma Musume') are showing a year-end rebound, raising expectations for improved performance next year.
According to the gaming industry on December 24, Kakao Games’ domestic release of 'Path of Exile 2' saw a strong start. After launching in early access on December 7, the game recorded approximately 580,000 concurrent users on its first day and topped daily sales rankings.
As of the same day, the game maintained around 370,000 concurrent users on the Steam platform over the past 24 hours, ranking among the top five globally. Even Elon Musk, CEO of Tesla and known gaming enthusiast, shared on his social media that he played 'POE 2' on a flight, garnering attention.
The game has also received positive reviews from domestic users. According to 'GameTricks', a PC gaming analytics service, 'POE 2' ranked 11th in domestic PC bang (internet café) market share as of December 24, attempting to break into the top 10.
'POE 2' is a hack-and-slash PC online game developed by Grinding Gear Games in New Zealand. It has been praised for its challenging gameplay and emphasis on high difficulty and rewarding elements.
Kakao Games successfully secured exclusive domestic distribution rights for 'POE 2', building on its stable operation of the previous title, 'Path of Exile' (hereafter 'POE'), since June 2019. Analysts attribute the success of the sequel to localized strategies and PC bang benefits tailored to the Korean market.
Meanwhile, existing flagship titles like 'Odin' are also showing signs of a rebound, further fueling optimism.
'Odin' climbed to 2nd place on Google Play Store’s sales rankings on December 23, up from 7th on December 11, thanks to the introduction of a new class, 'Destroyer', and large-scale events. As of 4 PM on December 24, the game had secured the top spot in real-time sales.
'Uma Musume' also re-entered the top 10 in sales rankings due to its 2.5th-anniversary update, climbing from outside the top 100. On December 23, it ranked 20th in Google Play Store’s sales rankings. The consistent addition of new content and a major update on December 18 have been met with positive user responses.
Kakao Games, which has faced lackluster performance this year due to the failure of new titles like the strategy game 'Stormgate', is now viewed as having a higher chance of improving its results next year, following the success of these games.
Han became CEO in March of this year. He prioritized structural reform and stabilizing Kakao Games' profit model, focusing on internal strengthening through the consolidation of non-gaming businesses and strict cost control.
Specifically, Kakao Games downsized or divested non-gaming divisions such as Kakao VX and its golf NFT business. It also reorganized personnel to focus on core areas like game development and publishing.
During the Q3 earnings conference call, Han highlighted key strategic priorities, including global expansion, extending to PC and console platforms, and diversifying genres. He stated, "We are actively exploring games that align with these strategic keywords, including equity investments."
However, while the performance of new titles is a positive signal, some caution that a significant improvement in results may be difficult due to the company's revenue structure.
For instance, while the previous title, 'POE', also performed well, its contribution to Kakao Games' overall revenue was limited since only PC bang connections and some platform-based sales were recognized.
As a result, analysts believe that a meaningful rebound in results will depend on the performance of major new releases, such as 'ArcheAge Chronicles' and 'Chrono Odyssey', both slated for release after next year.
An industry insider commented, "The self-developed 'Chrono Odyssey', expected to make a substantial contribution to earnings, is scheduled for release in late 2025, while the highly anticipated 'ArcheAge Chronicles' has been delayed to 2026."
#KakaoGames #HanSangwoo #PathOfExile2 #POE2 #Odin #UmaMusume #gamingindustry #newgame #ArcheAgeChronicles #ChronoOdyssey
