Top 500 Listed Companies 'Overcoming COVID-19'... Top 20 Lead Half of Revenue and Operating Profit

[Industry and Wealth Landscape Changed by COVID-19]
17% Sales Increase and 85% Operating Profit Surge Over 2 Years
Semiconductors and Bio Strong... Hotels and Airlines Hit Hard

Editor's NoteThe COVID-19 pandemic, which intensified in the first half of 2020, rapidly transformed the landscape of Korean industry and wealth. The spread of non-face-to-face culture due to social distancing led to the growth of untact (contactless) sectors, emerging as new powerhouses. The bio sector, which greatly benefited from the pandemic, also showed steep growth. Conversely, travel, hotel, and leisure industries collapsed helplessly. The status of traditional strong sectors such as semiconductors and ChaHwajeong (automobile, chemical, refining) remained solid. Changes in the industrial landscape also signaled shifts in the flow of wealth. A large number of new wealthy individuals emerged, leveraging the pandemic as a stepping stone. As the endemic phase of COVID-19 approaches, we examined changes in Korea’s industrial and wealth landscape through the performance and shareholder equity value changes of the top 500 listed companies in Korea.

[Asia Economy Reporters Lee Seon-ae and Lee Myunghwan] Despite the COVID-19 pandemic, the performance of Korea’s leading companies showed significant growth. The core industries driving Korea’s economy, semiconductors and the traditional powerhouse sectors of ChaHwajeong (automobile, chemical, refining), maintained their strong positions, while secondary batteries emerged as new leading players driving growth. The bio sector, which contributed to Korea’s K-quarantine efforts, demonstrated not only potential but actual performance. However, the travel and airline industries could not escape the storm of the untact (contactless) era.

On the 23rd, Asia Economy compared the performance of the top 500 companies by sales in the previous year with their 2019 results, just before the full onset of COVID-19. The total sales increased by 17.28%, from KRW 2,119.8498 trillion in 2019 to KRW 2,486.1615 trillion in 2021. Operating profit surged by 85.49%, from KRW 109.2259 trillion to KRW 202.5994 trillion, showcasing an 'earnings surprise.'

This represents a near-perfect growth trajectory that belies the impact of the COVID-19 pandemic. The driving force behind this recovery was the companies positioned at the top in terms of sales. The top 10 companies accounted for 36.99% of the total sales of the top 500 companies in 2021. They also held 45.73% of the operating profit share. The key players were Samsung Electronics, Hyundai Motor, SK, POSCO, LG Electronics, Kia, Korea Electric Power Corporation, Hanwha, SK Innovation, and SK Hynix, in that order.

Expanding the ranking to the top 20 companies, the dominance in performance becomes even clearer. The top 20 companies accounted for 50.13% of total sales and 55.08% of operating profit among the top 500 companies in 2021. Considering that their shares in 2019 were 50.80% for sales and 50.92% for operating profit, sales share slightly decreased but operating profit share increased, indicating solid performance by the leading companies. LG Chem, Hyundai Mobis, CJ, Samsung C&T, POSCO International, LG Display, Hyundai Heavy Industries Holdings, Korea Gas Corporation, S-Oil, and CJ CheilJedang led this performance.

When expanding the scope to the top 50 companies, they accounted for 67.53% of sales and 71.38% of operating profit in 2021. While the sales share slightly decreased from 68.51% in 2019 to 67.53% in 2021, the operating profit share increased from 67.11% to 71.38% during the same period.

The growth rate of operating profit among the top companies is remarkable. The combined operating profit of the top 20 companies reached KRW 111.5986 trillion, with a growth rate of 100.65%, surpassing the 85.49% growth rate of the top 500 companies.

A concentration trend was also observed among KOSPI and KOSDAQ listed companies. Comparing the two markets, KOSPI-listed companies captured more substantial gains. The sales growth rate for KOSPI-listed companies was 16.86%, while KOSDAQ-listed companies saw a 25.06% increase. However, operating profit growth was 86.76% for KOSPI and 63.79% for KOSDAQ. Among the top 500 companies by sales, 390 were KOSPI-listed, accounting for nearly 80%, while 110 were KOSDAQ-listed. Only one KOSDAQ-listed company was among the top 50.

By industry, sectors such as electrical and electronics, chemicals, steel and metals, medical precision instruments, transportation and warehousing, non-metallic minerals, services, and finance showed clear growth. The Korea Exchange’s KOSPI and KOSDAQ Market Divisions stated, "Despite the prolonged COVID-19 pandemic and increased uncertainty in international financial markets, the annual performance of listed companies in 2021 significantly improved. Except for some sectors, all showed performance improvements, with IT centered on semiconductors and medical precision industries leading the way." Nam Gil-nam, Director of the Capital Market Office, also explained, "Last year, the performance increase was particularly evident among large corporations."

The securities industry credits Korea’s manufacturing capabilities for overcoming the COVID-19 crisis. The first quarter earnings season of this year has concluded, with about 56% of listed companies exceeding operating profit expectations. Operating profit grew approximately 9% year-on-year. Lee Woong-chan, a researcher at Hi Investment & Securities, analyzed, "Despite concerns, KOSPI companies performed well in the first quarter of this year. Korea’s manufacturing capabilities, which saved the country during economic crises, remain strong, with key export industries such as semiconductors, automobiles, and chemicals still robust."

This content was produced with the assistance of AI translation services.