South Korea’s 10 Biggest Companies
As Asia’s fourth-largest economy, South Korea is a major player among the world’s top exporting nations.
Exports made up 53 percent of the Korean economy in 2011, according to the World Bank. That’s one of the highest rates globally, and much more than the world's No. 2 economy, China (29 percent) and emerging-market dynamo Brazil (12 percent). South Korean exports grew 19 percent last year.
Here's a look at the 10 biggest-listed South Korean companies by market cap that have benefited from the country’s export boom.
All of them are listed on the Korea Composite Stock Price Index, KOSPI. Rankings are based on market cap as of July 10, 2012.
Some of the companies on our list are global brands, while others aren’t well known outside of Asia.
Click ahead to find out.
By Rajeshni Naidu-GhelaniPosted July 20, 2012
10. SK Hynix
Market cap: $16.4 billion
Price-Earnings Ratio, P/E: NA
SK Hynix, formerly known as Hynix Semiconductor, is the world’s second largest memory chipmaker.
The company was founded in 1983 and changed its name to SK Hynix after SK Telecom paid $2.98 billion in February for a 21-percent stake in the firm.
Despite SK Hynix’s prominent position in the semiconductor business, the firm posted its third quarterly loss in April of $227.8 million, as slowing computer sales undercut chip prices. The stock is down almost 11 percent in the past 12 months to July 10.
Market analysts are still positive on the stock, with 26 out 46 polled calling for it to outperform; 14 recommend it as a buy, according to Reuters.
The company has announced a number of new initiatives recently in order to compete with tech giants Samsung Electronics and Micron. Last month, it announced the completion of a new semiconductor line that would help meet rising demand for data-storage chips used in Apple’s smartphones and tablets. The move came after the firm’s $250 million takeover of L_A_Media Devices (LAMD) to produce packaged chips. There have also been reports for the past few months that SK Hynix is considering buying operations of bankrupt Japanese chipmaker Elpida.
9. Shinhan Financial Group
Market cap: $18.2 billion
Shinhan Financial Group, South Korea’s largest banking services firm, is the only financial company to make the top-ten list.
The group was founded in 2001 as a holding company for 11 subsidiaries that include Shinhan Bank (originally named Hanseong Bank) — which is best known as the first bank in Korea — and Jeju Bank.
The group also has interests in asset management and life insurance.
Last year, the firm experienced a major shakeup with the appointment of new chairman Hang Dong-woo, after a public embezzlement scandal dented its image and led to the resignations of three top leaders.
The group is also among the country’s four biggest banks that are currently being probed by authorities on how the key interest rate has been set.
Market analysts expect the company to report an over 35 percent decline in net profit in the second quarter from a year earlier on the lack of gains from equity sales and an increase in administrative costs seen across South Korean banks.
The stock has fallen 23.8 percent in the 12 months to July 10. But 23 analysts out of 41 polled by Reuters think the company will outperform, with 10 calling it a buy and eight recommending it as a hold.
8. Samsung Life Insurance
Market cap: $18.8 billion
Samsung Life Insurance is biggest life insurer in South Korea with about 26 percent of local market share.
Founded in 1957, the insurer’s growth accelerated after it was incorporated under Samsung Group in 1963. Its initial public offering in 2010, which raised $4.4 billion, catapulted the firm to the status of one of South Korea’s most valuable companies. The insurer’s top shareholder is Lee Kun-hee, South Korea’s richest man and former CEO of parent firm Samsung Group. The company is at the heart of a web of Samsung Group cross-shareholdings that have come into question as Lee defends three lawsuits from relatives on his holdings in the conglomerate.
In a move to expand into emerging markets, there were reports in May that Samsung Life was planning a partnership with Dubai sovereign fund — Investment Corporation of Dubai (ICD) — to sell life insurance in the Middle East and north Africa.
The company’s stock is down 3.8 percent in the 12 months to July 10, but that is the smallest decline among the list’s top 10 firms that saw a negative percentage change in a year. About 17 analysts out of the 31 polled by Reuters think the stock will outperform, while 12 consider it a buy.
7. Hyundai Heavy Industries
Market cap: $19.8 billion
Hyundai Heavy Industries Co. is the world’s largest shipbuilding company.
The firm was started in 1947 as a construction business by Hyundai Group founder Chung Ju-yung, and moved into shipbuilding in the 1970s. By 1974, the company had built the world’s largest shipyard.
In 2002, the firm split from the Hyundai Group and became a part of the Hyundai Heavy Industries Group, which now has subsidiaries in engineering, heavy machinery, construction and green energy.
The company has announced a number of big deals recently, including a $1.2 billion ship order from Greece and three orders worth a total $600 million to build oil and gas rigs. It also raised $614 million by selling 1.5 percent of its 3.5 percent stake in Hyundai Motor in July — marking South Korea’s biggest stock sale this year.
Nevertheless, the global shipbuilding industry has been suffering from oversupply and weak demand.
Hyundai Heavy Industries stock is down a whopping 46.6 percent as of the 12 months to July 10 — the biggest decline on our list.
But 23 out of the 37 analysts polled by Reuters think the stock will outperform; 11 recommend it as a buy, while only 1 designates it a sell.
Pictured: A ship under construction at the Hyundai Heavy Industries dock in Ulsan, South Korea.
6. LG Chem
Market cap: $20 billion
LG Chem is South Korea’s largest chemical maker, and one of the leading suppliers of car batteries.
The company was founded in 1947 as Lucky Chemical Industrial and merged with LG Petrochemical in 2007. It operates in two segments —petrochemicals and electronic materials, such as rechargeable batteries for mobile phones, laptops and electric vehicles.
LG Chem’s notable customers include GM, to which it supplies batteries for the automaker’s plug-in hybrid, electric vehicle Volt.
In the past year, rising oil prices and slowing demand in China have hit LG Chem’s earnings hard. The company posted a 45-percent decline in first-quarter profit compared to a year earlier; its second- quarter net profit fell 40 percent to $327 million.
The firm’s stock is down 39.7 percent in the 12 months to July 10. But 26 out of the 42 analysts polled by Reuters say the company will outperform; 14 consider it a buy.
Pictured: South Korean President Lee Myung-Bak (2nd L) looks at an electric car at a LG Chem's car battery plant in Ochang, South Korea.
5. Hyundai Mobis
Market cap: $26.1 billion
Seoul-based Hyundai Mobis, a subsidiary of the Hyundai Motor Group, is the country’s leading maker of auto parts.
Founded in 1977 as Hyundai Precision Industry to produce containers, the company turned its focus to autos and launched the Galloper brand of vehicles in the 1990s.
After the Asian financial crisis, however, the firm reorganized itself as an auto parts specialist. It provides auto parts to South Korean carmakers Hyundai and Kia and international ones like Subaru and Mitsubishi.
Earlier this year, it signed a $1.07 billion deal to supply parts to General Motors and Chrysler.
The company’s stock is down 35 percent as of the 12 months to July 10, even though the firm reported an a 17-percent jump in first-quarter net profit to $828.7 million.
About 29 of the 46 analysts polled by Reuters think the stock will outperform; 15 consider it a buy.
Pictured: Hyundai Mobis employees assemble an automobile chassis at a plant in Asan, South Korea.
4. Kia Motors
Market cap: $29.2 billion
Kia Motors is South Korea’s second-largest automaker and a subsidiary of the Hyundai Motor Group.
Founded in 1944 as a manufacturer of steel tubing and bicycle parts, the company started making vehicles in 1957.
During the Asian financial crisis, Kia declared bankruptcy, which led Hyundai Motor to acquire a 51-percent stake in the firm. Since then, the automaker has gone on to expand globally with manufacturing plants in the U.S., Europe and China.
Tapping in to the world’s largest auto market, Kia’s China sales jumped over 30 percent in 2011. The company is planning to open its third factory in China this year toincrease annual capacity by 200,000 units to 730,000 units by 2014.
In Europe, Kia Slovakia recently reported a 10- percent increase in production of 149,000 cars in first six months of the year.
Kia US sales jumped nearly 18 percent in the first half of the year, versus a year ago.
Still, Kia's stock is down 5.7 percent, as of the 12 months to July 10. Some 29 of 49 analysts polled by Reuters say the stock will outperform; 18 recommend it as a buy.
Pictured: Kia's Naimo concept car at the International Consumer Electronics Show in Las Vegas.
Market cap: $32.6 billion
POSCO is the world’s fourth-biggest steelmaker, and backed by billionaire investor Warren Buffett.
The company was founded in 1968 as a joint venture between the South Korean government and tools manufacturer TaeguTec. It has since gone on to produce over 33 million tons of steel and has a joint venture with U.S. Steel called USS-POSCO in California.
This year the company expects to break ground on a $12-billion steel mill project in India’s eastern Orissa state.
POSCO has, however, like other global steelmakers been hit hard by slowing demand, lower product prices and higher raw-material costs. It posted a whopping 54 percent drop in first quarter profit this year of $370.78 million. A senior POSCO executive recently said in that he expects earnings to deteriorate further in the second half of the year.
Buffett’s Berkshire Hathaway owns around 5 percent of POSCO shares. The company’s stock is down 20.5 percent in the 12 months to July 10. But 27 out of 45 analysts polled by Reuters still think the stock will outperform; 14 consider it a buy.
2. Hyundai Motor
Market cap: $49.8 billion
Hyundai Motor is the world’s fifth-biggest carmaker, based on annual vehicle sales, and the top automaker in South Korea.
Founded in 1967, it launched the first Korean passenger car — the Hyundai Pony — in 1976. By expanding its presence in key markets like China, the carmaker sold 4.06 million vehicles in 2011.
Hyundai’s Genesis sedan was ranked the best mid-sized premium car in 2012 by J.D. Power and Associates, while the Elantra was named North American car of the year at the Detroit auto show.
Meanwhile, the carmaker is dealing with labor unrest over working conditions and pay. Employees staged their first strike in four years on July 13 after negotiations collapsed, which resulted in a loss of production worth $76.5 million over an eight-hour period. There are plans for new strikes, which could also affect affiliate Kia Motors.
The company’s stock is down 7.7 percent in the 12 months to July 10. But 29 of 50 analysts polled by Reuters expect the firm to outperform; 18 recommend it a buy.
Pictured: An assembly line of the Hyundai Motor factory in Ulsan, South Korea.
1. Samsung Electronics
Market cap: $165.2 billion
Samsung Electronics is the world’s biggest technology firm by revenue, and by far the largest-listed company in South Korea. Its market cap is more than three times larger than the closest rival — Hyundai Motor.
It was founded in 1969 and is the now the world’s biggest maker of memory chips, smartphones and televisions.
Samsung Electronics is the flagship subsidiary of South Korea’s biggest business conglomerate — Samsung Group — which has nearly 80 affiliates. The family-run group has a significant impact on South Korea’s economy, accounting for about one fifth of the country’s GDP.
The firm’s second quarter profit is estimated to have hit a record $5.9 billion, powered by strong sales of its flagship Galaxy brand of smartphones. It has also launched an online music service to compete head on with Apple’s iPhones.
Samsung Electronics is the only stock among South Korea’s top-10 companies to rise the last 12 months to July 10, gaining 27.2 percent. About 30 out of 52 analysts polled by Reuters think the company will outperform; 21 say it’s a buy.
Pictured: J.K. Shin, president of mobile communications for Samsung Electronics, presents the Galaxy S III smartphone at a launch event.