Many cast doubts on HD Hyundai Group’s decision to separate its ship maintenance, repair and overhaul (MRO) service in 2016. The move, however, has proved to be a masterstroke in reinvigorating South Korea’s No. 1 shipbuilding conglomerate eight years later.
Ninth largest
The combined market capitalization of HD Hyundai Group companies topped 50 trillion won ($36.3 billion) for the first time on May 28, elevating the shipbuilding and industrial group to Korea’s sixth-largest conglomerate. It was the ninth largest three years ago.
It also widened the market cap gap further with the country’s No. 7 chaebol Hanwha Group by 11.84 trillion won as of Friday.
Underdogs Revolt
In 2016 when the shipbuilding group was facing one of its worst business years with mounting losses of about 4.86 trillion won, its heir apparent Chung Ki-sun, then the head of the group’s corporate planning division, proposed the separation of the group’s ship MRO and parts businesses.
But Chung persuaded management to spin off the MRO business in late 2016 and headed up the separated company the following year.
Eight years later, the business has grown into a lucrative company, Hyundai Marine Solution, which is expected to generate 242.5 billion won in operating profit this year on sales of 1.64 trillion won, according to a consensus of the country’s securities firms.
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Source: Kedglobal
