The combined operating profit of Samsung Group and Hyundai Motor Group took up over 30 percent of all South Korean companies’ operating profit for the first time

Samsung, Hyundai Motor operating profit portion tops 30% for first time

2014.01.13 15:06:27

The combined operating profit of Samsung Group and Hyundai Motor Group took up over 30 percent of all South Korean companies’ operating profit for the first time. This raises a concern that the Korean economy’s heavy reliance on the two conglomerates would increase instability in the financial market and real economy when the country is hit by a crisis. The aggregate operating profit of the top 10 conglomerates by assets came to 61.2 trillion won ($57.9 billion) in 2012, accounting for 43.2 percent of 141.7 trillion won of all domestic companies’ operating profit, said Chaebul.com Monday.
The combined operating profit of Samsung Group and Hyundai Motor Group stood at 43 trillion won, comprising 30.4 percent of the total.
Following the US-originated financial crisis in 2008, the share of the two business groups surged to 19.7 percent with 23.4 trillion won in 2009, to 25.2 percent with 39.2 trillion won in 2010, to 24.6 percent with 36.3 trillion won in 2011 to more than 30 percent in 2012 for the first time.
The country’s top conglomerate Samsung Group saw the sharpest rise in its portion.
Samsung Group’s 30.2 trillion won operating profit took up 21.3 percent of the total operating profit of all companies in 2012. This is up 7.7 percentage points in three years from 13.6 percent of 2009, when Samsung Group’s operating profit was worth 16.2 trillion won.
The share of the conglomerate’s flagship behemoth Samsung Electronics came to 5.4 percent in 2009, 9.6 percent in 2010 and 7.9 percent in 2011, staying below 10 percent, but surged to 13.1 percent in 2012.
The share of Hyundai Motor Group’s operating profit climbed from 6.1 percent in 2009 to nine percent in 2012, approaching the 10 percent mark, as the company’s operating profit expanded from 7.2 trillion won to 12.8 trillion won over the period.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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