Holding companies are outpacing their subsidiaries in stock gains as sharp rallies in the subsidiaries trigger a reassessment of the parent firms' stake values. Amid continued rallies at SK hynix (000660.KS) and Hyosung Heavy Industries (298040.KS) on expectations of improving conditions in the semiconductor and power equipment sectors, their parent companies SK Square (402340.KS) and Hyosung Corp. (004800.KS) are climbing with even greater momentum.
According to the Korea Exchange on Thursday, SK Square was trading at 801,000 won, up 76,000 won or 10.48% from the previous session, setting a new all-time high. SK hynix also rose 90,000 won or 7.36% to 1.31 million won, reaching the "1.3 million won nix" milestone.
Hyosung Group affiliates showed a similar pattern. Hyosung Corp. surged 30,000 won or 17.54% to 201,000 won. Hyosung Heavy Industries, the highest-priced stock in Korea, rose 370,000 won or 10.42% to 3.92 million won. Although its gain was relatively smaller, the stock touched 4 million won intraday, extending its record-high streak.
The moves reflect how gains in subsidiaries are immediately fueling expectations of higher stake values. Expectations for a reduction in the holding-company discount are adding to the upward momentum. SK Square, the largest shareholder of SK hynix with roughly a 20% stake, is structured to fully benefit from the semiconductor industry's upturn.
Hyosung Heavy Industries is rapidly expanding its order book on the back of increased power infrastructure investment in North America and rising electricity demand from artificial intelligence (AI) data centers. First-quarter new orders reached approximately 4.2 trillion won ($3.1 billion), a record high, with more than 70% originating from North America.
"Orders have expanded to record levels, and the business scope is broadening from North America-focused ultra-high-voltage competitiveness to responding to data center power structures," said Son Hyun-jung, an analyst at Yuanta Securities Korea. "Orders, product mix, and growth drivers are all being upgraded simultaneously."
Meanwhile, a rare downgrade report on SK hynix emerged from the brokerage community on the same day. BNK Investment & Securities cut its investment rating on SK hynix to "hold" from "buy," while maintaining its target price at 1.3 million won. "First-quarter results beat market consensus but fell short of the recently elevated expectations," said Lee Min-hee, an analyst at BNK Investment & Securities. "There are positive factors such as the second-half shareholder return policy and the issuance of American depositary receipts (ADRs), but the stock needs to be viewed from the perspective of a trading range."
