The Throne of South Korea's Economy Changes Hands, Hyundai Motor Group's Q1 Operating Profit Surpasses Samsung for the First Time

Hyundai Motor Group's Q1 Operating Profit 6.1638 Trillion KRW
Surpasses Samsung Group's 2.97 Trillion KRW

Hyundai Motor Group has reportedly earned more money than Samsung Group for the first time in history in the first quarter of this year. Due to the collapse in semiconductor prices and the slowdown in global IT demand for TVs and displays, Samsung Electronics and Samsung-affiliated listed companies faced a challenging first quarter. Meanwhile, Hyundai Motor Group performed well in new markets such as electric vehicles, setting new monthly sales revenue records.

On the 5th, Asia Economy, commissioned by financial information firm FnGuide, reported that the first quarter revenue and operating profit forecasts for major Hyundai Motor Group listed companies (Hyundai Motor Company, Kia, Hyundai Mobis, Hyundai Steel, Hyundai Glovis, Hyundai Construction, Hyundai Wia, Hyundai Rotem, Hyundai AutoEver, Innocean) are 92.2691 trillion KRW and 6.1638 trillion KRW, respectively.

Meanwhile, the combined revenue and operating profit forecasts for 12 Samsung Group companies (Samsung Electronics, Samsung C&T, Samsung SDS, Samsung SDI, Samsung Electro-Mechanics, Samsung Engineering, Samsung Heavy Industries, Hotel Shilla, Cheil Worldwide, S-1, Samsung Biologics, Samsung Securities) are 94.0984 trillion KRW and 2.97 trillion KRW, respectively. Hyundai Motor Group’s major listed companies’ operating profit is approximately 3.2 trillion KRW higher.

This survey excluded relatively smaller listed companies for which securities firms do not provide earnings estimates. Also, financial affiliates that delay earnings announcements due to changes in accounting standards this year were excluded. However, even if the excluded companies’ earnings are combined, the forecast that Hyundai Motor Group’s operating profit will exceed Samsung Group’s is unlikely to change.

For example, if the first quarter 2023 earnings of Hyundai BNG Steel (last year’s Q1 revenue 344 billion KRW, operating profit 32.1 billion KRW) and Hyundai Motor Securities (operating revenue 245.4 billion KRW, operating profit 39.4 billion KRW), which were excluded from Hyundai Motor Group’s listed companies’ forecast, are added, Hyundai Motor Group’s estimated revenue becomes 92.8585 trillion KRW and operating profit 6.2353 trillion KRW.

Similarly, adding last year’s Q1 earnings of Samsung Life Insurance (operating revenue 9.3047 trillion KRW, operating profit 323.8 billion KRW), Samsung Fire & Marine Insurance (operating revenue 6.1976 trillion KRW, operating profit 588.9 billion KRW), Samsung Card (operating revenue 930.8 billion KRW, operating profit 216.4 billion KRW), and Multicampus (revenue 80 billion KRW, operating profit 6.9 billion KRW), which were excluded from Samsung Group’s forecast, results in total revenue of 110.6115 trillion KRW and operating profit of 4.106 trillion KRW. In other words, even if Samsung Group’s listed companies deliver surprise earnings that beat market expectations, the gap has widened to a level that is difficult to overcome.

Just one year ago, Samsung Group posted overwhelmingly superior earnings compared to other groups. In the first quarter of last year, the 12 Samsung Group companies included in this survey recorded operating profits of 16.2689 trillion KRW. In contrast, the 10 Hyundai Motor Group companies earned 5.34 trillion KRW in operating profit. In other words, Samsung earned three times more. Hyundai Motor Group ranked third after Samsung and SK. However, due to changes in market conditions, Hyundai Motor Group, established in 2000, has for the first time in history taken the top spot as the highest-earning company in Korea within just one year.

The situation is unlikely to change in the second quarter. Semiconductor prices, which have plummeted, continue to fall without bottoming out. Meanwhile, Hyundai Motor continues to break monthly sales records this year. The gap may widen further in the second quarter. The focus is on the full-year performance. If semiconductor prices rise in the second half as the market predicts, Samsung could overturn the situation and maintain its number one position. There is a term called the "Samsung Republic," referring to Samsung’s dominance in the Korean business world since the 2000s after leading the global semiconductor industry in the 1990s. Everyone is watching whether Hyundai Motor can run shoulder to shoulder with Samsung in the future.

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