First private equity fund to be allocated to a large corporate group … 64 places last year’s net profit was half

《The ups and downs of the main industry are intensifying, and the asset classification of large Korean companies is shaking. While the ranking of information technology (IT) companies like Netmarble and Kakao has increased markedly, the size of companies that have suffered from industry worsening and restructuring has shrunk. As the main industries that have supported the Korean economy, such as semiconductors and petrochemicals, have suffered weakness, the profits of large companies have been new in half a year.

Private equity (PEF), a major player in the M&A market, has become a group within the top 60 in terms of assets. Furthermore, while the range of business in information technology (IT) companies has increased significantly, construction and petrochemical companies, which faced the consequences of the recession, have shrunk. The impact of the new coronavirus infection (Corona 19) is dramatically changing the weather forecast for the industry, so the ranking of large companies is expected to fluctuate next year.

On Day 3, the Fair Trade Commission announced that at the end of last year, 64 business groups with a total asset value of more than 5 trillion won were designated as the target companies to disclose. This is the largest increase since 2017, when state-owned companies were excluded with an increase of 5 compared to the previous year (59). Typically, a group of companies subject to disclosure is recognized as a financial classification based on assets.

○ Private Equity Fund to ‘Big Business’ … IT Advances like Kakao

IMM Investment was the first private equity firm to be designated as a group of publicly traded companies. With assets of 6.3 trillion won, it includes unicorn companies (startups worth more than $ 1 billion) in the investment portfolio, including Kupang, smart brothers and wicked men. The Fair Trade Commission saw IMM as a group of companies with 79 affiliates. Additionally, KG, Samyang, HMM (formerly Hyundai Merchant Marine), and Janggeum Merchant Marine were recently appointed.
Within the top 10, the classification of assets in the business group remained the same. Like last year, Samsung, Hyundai Motor, SK, LG, Lotte, and POSCO were in this order. The only change was that Hyundai Heavy Industries, which was in tenth place, moved to ninth place, and Agricultural Cooperatives, which was ninth place, to tenth place.
In the middle and low regions, the increase in the ranking of IT companies was notable. Kakao was ranked 23rd, ranking nine places higher than the previous year (32). Naver (41) and Nexon (42) climbed 4 and 5 stairs respectively. Netmarble rose from 47 to 47, ranking the most. On the other hand, the ranks of Jungheung Construction (37 → 46), Taekwang (40 → 49), and Yujin (54 → 62) decreased significantly, so the size of “heavy and heavy” companies decreased significantly. The number of affiliates in the target group of companies increased by 181 from the year before to 2284. By group of companies, the number of Kakao affiliates, which expanded to banks specialized in Internet and smart mobility, increased by 26, the highest increase. The number of mutually limited corporate groups with assets of more than 10 trillion won was 34, the same as last year.○ Already half the net income before Corona 19

The total amount of assets of the target group of companies increased from 136 trillion won to 2176 trillion won. Assets increased, but management performance deteriorated. Sales (1.46 trillion won) decreased 2.35% from a year earlier, and net profits fell 48.1%. The debt ratio was 71.7%, 3.9 percentage points more than the previous year.

Compared to the previous year, Samsung’s net profit decreased by 1.9 trillion won and decreased more, followed by SK (-14 trillion won) and LG (-3.5 trillion won). The FTC said: “In the case of Samsung, the performance of the semiconductor industry was deteriorating, and SK and LG were affected by the poor petrochemical industry.”