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SK Group's combined market capitalization surpassed 2,000 trillion won for the first time in history as key affiliates SK hynix and SK Square both set fresh closing-price highs. SK Group's share of South Korea's stock market also climbed past a quarter. With the top five conglomerates accounting for over 70% of the entire market, analysts say whether a group focuses on semiconductors is differentiating their relative standings.
According to Koscom Check on the 16th, the combined market capitalization of SK Group's 21 listed companies (including preferred shares) stood at 2,020.1712 trillion won. The group's market capitalization, which was 601.4086 trillion won at the end of last year, has surged 236% this year amid a steep market rally. Compared with early last year (200.5788 trillion won), the group's market cap has grown a remarkable tenfold in just one year and six months. It accounted for 26.2% of the domestic stock market's (KOSPI, KOSDAQ, KONEX) total market cap of 7,717.7009 trillion won.
The company driving SK Group's market cap gains is unquestionably SK hynix. SK hynix closed at 2,382,000 won on the day, up 4.11% from the previous session, setting a record closing-price high. Its previous high was 2,360,000 won on the 2nd. SK hynix accounts for the largest share within the group at 84%.
SK Square, ranked second in market cap within the group at 9.8%, also set a fresh high, closing at 1,501,000 won, up 6.23%. SK Square is the largest shareholder of SK hynix (a 20.1% stake), and its net asset value (NAV) expands as SK hynix's share price rises. The financial investment industry assesses that as SK hynix's weighting in major domestic and overseas exchange-traded funds (ETFs) nears their caps, SK Square is emerging as an alternative investment for SK hynix. Next were SK (48.7943 trillion won), SK Telecom (21.5004 trillion won), and SK Innovation (19.0184 trillion won).
The gap with Samsung Group is narrowing quickly. In early last year, Samsung Group's market cap was just 37% relative to SK Group's, but it surpassed half at 56.8% at the end of last year and reached 74.1% as of the day. Samsung Group's market cap stood at 2,724.6714 trillion won on the day, down 3.7% from 2,828.7936 trillion won on the 2nd, when the KOSPI hit its closing-price high (8,801.49), while SK Group's market cap rose 1.7% over the same period.
The share-price directions of Samsung Electronics and SK hynix, the nation's top two companies by market cap, also affected the narrowing gap between the two conglomerates. In a recent report, Park Sang-hyun, an analyst at iM Securities, noted that "the U.S. Philadelphia Semiconductor Index shows a high correlation with SK hynix's market cap relative to Samsung Electronics, so if the index rises further, the possibility of a reversal in the market cap rankings between these companies cannot be ruled out."
As SK Group's market cap swells rapidly, the standing of the nation's top five conglomerates (Samsung, SK, Hyundai Motor, LG, HD Hyundai) in the stock market is also diverging by group. The five groups' combined market cap stood at 5,530.5348 trillion won on the day, accounting for 71.7% of the domestic market. The five groups' market cap share has been rising steadily, from 48% in early last year to 54.8% at the end of last year.
Looking at the breakdown among the five groups, however, fortunes clearly diverged depending on whether semiconductors were a core business. Hyundai Motor Group's share of the domestic market fell from 6.3% in early last year to 4.7% on the day. Over the same period, LG Group declined from 6.2% to 3.1%, and HD Hyundai Group from 3.4% to 2.5%.
As domestic companies' earnings outlooks improve, led by semiconductors, the market-cap concentration centered on Samsung Group and SK Group is likely to deepen further. In a report on the day, Daishin Securities raised its KOSPI target from 8,800 to 11,500, citing the rationale that the semiconductor sector's price-earnings ratio (PER) will normalize from the current 5.43 times to around 8.8 times. Lee Kyung-min, an analyst at Daishin Securities, explained that "about 70% of DRAM transactions for AI servers are conducted as long-term contracts," adding that "with concerns over rising interest rates already substantially priced in, the expansion of long-term contracts could lead to a normalization of semiconductor valuations."
The KOSPI closed at 8,726.6 on the day, up 2.11% from the previous session. Foreign investors bought 1.5339 trillion won worth of domestic stocks, marking net buying for a third consecutive trading session.
