Large Corporations Concentrate Equity Investments in 'Secondary Batteries'... 4.7 Trillion Won Invested Over 3 Years

LeadersIndex, Analysis of Large Corporations' Investments in Other Companies
36.7% of Total Investment Amount in Secondary Batteries

Domestic conglomerates' most frequent target for equity investments over the past three years has been companies in the 'secondary battery' industry as they seek new growth engines. This year, the sector with the largest increase in investments was robotics and drone companies, while the field with the highest total investment amount was artificial intelligence (AI) and big data.

On the 17th, Leaders Index, a corporate analysis research institute, analyzed the equity investment status of 354 companies that submitted their business reports for the first half of the year among the top 500 companies by sales. The analysis showed that from 2021 through the first half of this year?a period of three and a half years?1,368 companies acquired equity stakes in other companies, with a total investment amount of 12.8212 trillion KRW based on the initial acquisition cost. (Excluding investments in subsidiaries and group affiliates)

The number of companies investing in other companies and the amount of equity investment decreased from 330 companies and 2.1225 trillion KRW in 2021 to 335 companies and 1.2976 trillion KRW in 2022, then surged significantly to 512 companies and 8.7497 trillion KRW last year. However, the upward trend slowed this year. As of the first half, 191 companies invested 651.3 billion KRW, which is a 50% decrease compared to the same period last year.

The industry in which conglomerates made the most equity investments was secondary batteries. Over the past three and a half years, 100 companies received a total of 4.7018 trillion KRW, accounting for an overwhelming 36.7% of the total investment amount. Next was the content and entertainment sector, which attracted 1.9769 trillion KRW from 137 companies during the same period. The third was the bio new drug development sector, with equity investments totaling 1.5918 trillion KRW in 228 companies. Fourth was the eco-friendly energy sector (82 companies, 1.0527 trillion KRW), followed by AI and big data (221 companies, 817.6 billion KRW).

This year, the priority of investment sectors shifted. Up to the first half of the year, the sector with the most notable increase in investments by conglomerates was robotics and drones. In 2021, 9 companies received 14.4 billion KRW, which jumped to 23 companies and 101 billion KRW last year, and further increased to 9 companies and 103.3 billion KRW in the first half of this year?nearly a 13-fold increase in two and a half years. The second most invested sector was eco-friendly energy, which saw investments rise from 16 companies and 72.2 billion KRW in 2021 to 36 companies and 840.1 billion KRW last year, with 19 companies receiving 47.5 billion KRW in the first half of this year. The third was AI and big data, which steadily increased from 58 companies and 99.8 billion KRW in 2021 to 84 companies and 526.5 billion KRW last year, and 34 companies and 117.3 billion KRW in the first half of this year. In terms of investment amount growth rate, this sector ranked first among conglomerate investment sectors in the first half. The fourth and fifth largest equity investment sectors this year were bio and new drug development and the Internet of Things (IoT) sector.

On the other hand, the sector where conglomerates reduced investments the most was blockchain and fintech. In 2021, 7 companies received 15.7 billion KRW, but last year, 6 companies received 10.6 billion KRW, marking a 32.4% decrease, and in the first half of this year, 4 companies invested 3.1 billion KRW, showing a clear downward trend. The attractiveness of investments in the platform and application sector also declined. Conglomerates invested 215.3 billion KRW in 8 companies in 2021, but although the number of companies increased to 57 last year, the investment amount decreased by 9.4% to 195.1 billion KRW. In the first half of this year, it was only about 48 billion KRW across 25 companies.

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