Samsung Group’s market capitalization has fallen below 600 trillion won ($450 billion) for the first time this year, driven by a sharp decline in Samsung Electronics’ stock price, while other major South Korean conglomerates like SK Group and Hyundai Motor Group are also grappling with significant market cap losses.
As of Sept. 11, according to the Korea Exchange (KRX), the combined market capitalization of Samsung Group’s 17 listed companies stood at $443.05 billion at the close of trading. With the exception of Samsung SDI, the stock prices of all 16 other Samsung affiliates fell, pushing the group’s market cap below the $450 billion mark.
At the end of last year, Samsung Group’s market cap was $490.14 billion, which had swelled to over $537.14 billion by July this year. However, within just two months, nearly $94 billion was wiped out, primarily due to the underperformance of Samsung Electronics.
In July, Samsung Electronics’ market cap was over $387.94 billion, as it was on the verge of reaching $67 per share. But as of Sept. 11 close, it has dropped to $288.71 billion, with the stock price closing at $48.45. In intraday trading, the stock hit $47.92, marking its lowest point in a year.
The decline in Samsung Electronics’ stock has been driven by foreign investors who have shifted to selling. The stock has fallen for seven consecutive trading days since Sept. 3, during which time foreign investors sold nearly $2.68 billion worth of shares.
Despite the overall decline, some financial subsidiaries of Samsung, such as Samsung Life Insurance, Samsung Fire & Marine Insurance, Samsung Card, and Samsung Securities, have seen their stock prices rise since the beginning of the year, driven by optimism around the company’s “corporate value enhancement program.”
The corporate value enhancement program refers to initiatives aimed at boosting a company’s overall value, often through strategies like improving governance, optimizing business operations, or increasing shareholder returns.
Samsung Biologics has also shown strong performance, with its stock price nearing the $746 mark. However, with Samsung Electronics accounting for such a large portion of the group’s market cap, any significant recovery for the group depends on an improvement in Samsung Electronics’ stock price.
The issue is that market expectations for Samsung Electronics continue to decline. While some securities firms believe the stock is currently facing excessive declines, they have still lowered their target prices for the company.
The weaker-than-expected demand for memory semiconductors used in PCs and mobile devices has led analysts to predict that Samsung’s third-quarter results will fall short of market expectations. Major securitires firm such as DB Financial Investment, Hyundai Motor Securities, KB Securities, Meritz Securities, and Korea Investment & Securities have all lowered their target prices for Samsung Electronics in recent weeks.
It’s not just Samsung Group that is experiencing a drop in market capitalization. Many South Korean conglomerates have seen similar declines. SK Group’s 20 listed companies had a combined market cap of over $186.51 billion in July, but following a correction in SK Hynix’s stock price, that figure has fallen to $137.67 billion.
LG Group’s 11 listed companies saw their market cap shrink from $138.76 billion at the end of last year to $123.99 billion. Hyundai Motor Group, which had overtaken LG Group to become the third-largest conglomerate in June with a market cap exceeding $119.36 billion, has since seen its market cap fall to $98.18 billion, lower than last year’s $99.2 billion.
Other major conglomerates have also experienced changes in their market capitalization. As of the close on the 11th, POSCO Group led with $44.20 billion, followed by HD Hyundai Group at $41.28 billion. Celltrion Group’s market cap stood at $32.91 billion, with Hanwha Group at $28.83 billion. Meanwhile, Kakao Group recorded $23.64 billion, and Naver Group posted $18.76 billion.
Notably, HD Hyundai Group, which recently listed HD Hyundai Marine Solutions, along with Celltrion Group and Hanwha Group, have seen their market caps increase compared to the same period last year. On the other hand, POSCO Group, Kakao Group, and Naver Group have experienced declines.
