HD Hyundai Marine Solutions, another subsidiary of South Korea's largest shipbuilding group HD Hyundai (formerly Hyundai Heavy Industries Group), was officially listed, and its stock price soared on the first day, and its market value increased significantly. This milestone is expected to help parent company HD Hyundai leap to eighth place in the ranking of South Korean chaebol companies.
HD Modern Marine Solutions goes public, raising funds for business expansion and mergers and acquisitions
On May 8, HD Hyundai Marine Solution (formerly HD Hyundai Global Services), a comprehensive solutions subsidiary of South Korea's HD Hyundai Heavy Industries Group, was officially listed on the Korea Stock Exchange (KSE).
Chung Ki-sun, Vice Chairman of HD Hyundai, and Lee Ki-dong, President of HD Hyundai Marine Solutions, attended the listing ceremony held at the Seoul Building of the Korea Stock Exchange.
Based on the data released by the Korea Fair Trade Commission (KFTC) in 2023, HD Hyundai's total fair assets are 80.668 trillion won, ranking 9th, and the gap with GS Group's 81.8360 trillion won (about 850 million U.S. dollars) is only 1.168 trillion won (about 850 million U.S. dollars).
HD Hyundai Marine Solutions closed at KRW 163,900 per share on the first day of listing, up 96.52% from the IPO price of KRW 83,400 per share, increasing the total market value of HD Hyundai Marine Solutions to KRW 7.2854 trillion.
Previously, HD Hyundai Marine Solutions set the public offering price at KRW 83,400 per share, raising a total of KRW 742.3 billion through this listing. The total number of shares offered by the company is 8.9 million shares, half of which are owned by the second-largest shareholder, Kohlberg Kravis Roberts & Co. (KKR). The remainder is made up of new share issuances. HD Hyundai Marine Solutions has expanded its capital by KRW 371.1 billion.
HD Modern Marine Solutions plans to raise funds through the IPO to invest in facility construction and mergers and acquisitions (M&A). Specifically, KRW 61.9 billion will be used for the construction of logistics centers and port warehouses, KRW 231.7 billion will be used for investment in digital shipping and port shares, KRW 48.3 billion will be used for working capital, and KRW 48.3 billion will be used for the acquisition of engine AS businesses of other corporations.
In November last year, HD Hyundai Global Service held an extraordinary general meeting of shareholders and voted to approve a change to the company's name to HD Hyundai Marine Solutions. According to the company, the move aims to demonstrate its will to provide all the solutions needed by the marine industry, including its will to lead the sustainable future of the marine industry through environmentally friendly technologies and digital transformation, and to transform the company into an integrated solutions company in the marine industry sector.
Founded in 2016, HD Hyundai Global Services is a separate corporate from its parent company, HD Hyundai Heavy Industries, and is the first professional company in Korea to start with aftersales services throughout the life cycle of ships, such as maintenance, repair, and remodeling. Since its establishment, the business has gradually expanded to the fields of engineering-based environmental retrofitting, refueling, and digital solutions.
Based on the experience and technology accumulated in the past, the company has developed a service platform as a total solution provider to meet the needs of customers. In addition to meeting the urgent and subsequent needs of vessels built by HD Hyundai's shipbuilding subsidiaries, HD Hyundai Marine Solutions also provides full lifecycle services covering the vessel from delivery to dismantling, as well as technical support, parts supply and warranty services for ships, marine engines, motors and engine power plants.
Currently, HD Modern Marine Solutions is poised to become the leading integrated solution provider in the marine sector with its innovative marine digitalization platform. The company collects data on the ship's fuel consumption, weather and engine load conditions through the Smart Solution to derive optimal operational solutions, which, combined with the analysis of accumulated data, predicts and informs the replacement cycle of major ship parts and detects any signs of anomalies.
Performance has steadily climbed, and HD Modern Marine Solutions aims to become an industry leader
In recent years, the performance of HD Modern Marine Solutions has steadily increased thanks to the improvement of the ship accessories service business brought about by the continuous strengthening of the new international maritime environmental protection regulations, as well as the expansion of digital control business such as intelligent ship operation and management. In 2017, the company achieved operating income of 240.3 billion won (about 190 million US dollars) and an operating profit of 54.6 billion won (about 43 million US dollars). In 2022, the company achieved an operating income of 1,333.8 billion won (about 1 billion US dollars) and an operating profit of 142 billion won (about 110 million US dollars).
In the first quarter of this year, the company achieved operating income of 383 billion won (about 279 million US dollars), a year-on-year increase of 19.3%, thanks to the continuous growth of high-profit ship parts and services and environmentally friendly ship refit business; The operating profit was 51.5 billion won (about 3.7 million US dollars), a year-on-year increase of 13.2%.
Since 2023, HD Modern Marine Solutions has been active in the industry arena in Korea and around the world. In May, the company participated in the 2023 World Climate Industry Expo (EXPO) in Busan with HD Hyundai. WCE)" and showcased AI-based big data solutions that connect artificial intelligence (AI) technology and ocean data to help eliminate global logistics stagnation and reduce logistics costs. In June, the company undertook a contract for the reliquefaction system renovation of five LNG carriers of Norwegian LNG shipping company Cool Company Ltd. (CoolCo), with a total amount of about 50 million US dollars. This is also the first time that a Korean company has received an order for the renovation of LNG ship reliquefaction systems. In September, the company signed a business agreement with the Korea Small and Medium-sized Venture Enterprise Promotion Corporation (KOSME) for the "Joint Response to ESG Supply Chain for Small and Medium-sized Enterprises in the Shipbuilding Industry." In October, the company signed a business agreement (MOU) with KLCSM, a ship management subsidiary of South Korea's SM Group, to strengthen cooperation on energy efficiency improvement for shipping vessels to jointly promote the commercialization of eco-friendly marine biofuel oil.
HD Modern Marine Solutions plans to use this listing as an opportunity to further expand its business. Lee Ki-dong, a representative of the company, said: "Standing on the starting line of a new take-off, I feel a great responsibility. Based on the technology and know-how accumulated over the past 50 years, the company will play a central role in the sustainable marine industry and grow into a company that leads the infinite possibilities of the ocean that HD Hyundai aspires to. ”
With the launch of HD Hyundai Marine Solutions, South Korea's financial industry said that this move is expected to make HD Hyundai, which has expanded its capital, among the top eight in the asset strength ranking of Korean chaebol companies.
According to data released by the Korea Fair Trade Commission, HD Hyundai's total fair assets gap with GS Group, which ranked eighth, was only 1.168 trillion won last year. In 2022, SK Group overtook Hyundai Motor Group to take second place for the first time in 17 years, and the spin-off and mergers and acquisitions of its subsidiaries also played a major role. At that time, SK hynix, a Korean semiconductor manufacturer affiliated with SK Group, increased its assets by 20.9 trillion won due to increased semiconductor revenue and the acquisition of Intel's NAND flash memory business, and SK Innovation, a South Korean electric vehicle battery technology company under SK Group, also set up a subsidiary after splitting its battery business and oil development business.
In Korea, fair assets are the sum of the total assets of the general subsidiaries of a large conglomerate and the total capital of the financial subsidiaries. HD Hyundai rose from 10th place in 2019 to 9th place in 2020 and remained in ninth place for four consecutive years until last year. It is reported that HD Hyundai also plans to promote the public offering of HD Hyundai website solutions from a medium- to long-term perspective, and HD Hyundai Oil Bank has also tried to IPO several times.