Hydrogen Hope fuels shares of Korean conglomerate Hyosung, announces new billionaire
Cho Hyun-sang, a member of the family that controls South Korean industrial conglomerate Hyosung Group, entered the billionaire ranks for the first time, as shares of industrial materials subsidiary Hyosung Advanced Materials, have climbed more than 400% since the start of the year.
Hyosung Advanced Materials derives most of its money from the sale of tire cables, which help strengthen tires, and accounted for 54% of the Seoul-based company’s total revenue in the second quarter of this year. It reported that revenue rose 131 percent to 8.7 trillion won ($ 7.4 billion) in the second quarter on the back of restocking demand from automakers, while net profit was 1 trillion won. won ($ 855.6 million), compared with a loss of 400 billion won ($ 340 million). ) at the same time last year.
More importantly for investors optimistic about eco-friendly cars, Hyosung Advanced Materials also manufactures carbon fiber. The company claims to be the only Korean producer of the strong, lightweight material used in hydrogen fuel cell vehicles, the lesser-known cousin of electric vehicles. Hydrogen-powered cars use hydrogen gas from their fuel tanks and combine it with oxygen in the air to produce electricity, emitting only water vapor through the exhaust pipe.
Carbon fiber is the basic material of the fuel tank of hydrogen cars, according to Hyosung Advanced Materials. The company, which was split up and listed on the stock exchange in 2018, said it plans to invest 1,000 billion won (about $ 850 million) per year until 2028 to expand its only carbon fiber factory. , in the city of Jeonju, in southwestern Korea. Hyosung Advanced Materials has not announced any plans to build new carbon fiber factories.
Shares of its parent company, Hyosung Corp., and other companies in the group also rose on investor optimism for hydrogen technology. Since the start of the year, shares of Hyosung Chemical, which is set to build the world’s largest liquid hydrogen plant, are up about 160%; Hyosung Heavy Industries, which builds hydrogen refueling stations, grew by around 25%; and Hyosung Corp. have increased by more than 60%.
Promoting environmentally friendly projects, including hydrogen cars, has been a top priority for South Korean President Moon Jae-in. Last year, the Korean government announced that it would invest 114 trillion won ($ 95 billion) over five years in green projects, including targeting 200,000 hydrogen cars on the roads by 2025, against 5,000 in 2020. In February, Korea announced an investment of $ 43. billion dollars plan to build the world’s largest wind power plant by 2030, propelling Gim Seong-gon, the founder of Korean wind tower maker CS Wind, into the billionaire ranks.
Cho, 49, is the second largest shareholder in Hyosung Advanced Materials, with just over 12% of the capital. The main shareholder is Hyosung Corp. with about 21%. Cho is also the parent company’s second largest shareholder, with around 21%, and is its vice chairman. Its other assets include stakes in Hyosung Chemical and Hyosung Heavy Industries, as well as a group of private companies such as ATM maker Hyosung TNS, car dealership Class Hyosung and real estate company Shin Dong Jin. Combined, Forbes estimates his net worth at $ 1.4 billion.
Cho is the youngest of three sons of Seok-rae, Honorary Chairman of Hyosung Corp. Seok-rae is the eldest son of its founder, Hong-jai. The Hyosung Group traces its history back to 1966, when Hong-jai founded Tongyang Nylon, which focused on fibers and textiles.
Hyun-sang, the new billionaire, first appeared on Korea’s 50 richest list in 2017 with a net worth of $ 700 million. It dropped from the list the following year when shares of Hyosung Corp. collapsed after a corporate restructuring that included the split of four companies (Hyosung Advanced Materials, Hyosung Chemical, Hyosung Heavy Industries and Hyosung TNC). Hyun-sang’s older brother Hyun-joon, who is chairman of Hyosung Corp., last appeared on Korea’s 50 richest list in 2018 with a fortune of just over $ 1 billion. dollars. Hyun-joon, who was given a three-year suspended prison sentence in November last year for embezzlement and breach of trust, also profited from the rise in Hyosung’s stock and his fortune returned to the top. a billion dollars.
Before joining the family business in 2000, Brown University graduate Hyun-sang was a consultant at Bain & Company and worked at Japanese telecom operator NTT.
Elsewhere in Korea, Lee Sang-ryul, founder and co-CEO of chemical company Chunbo, also recently became a billionaire thanks to the growing craze for environmentally friendly vehicles. Lee’s company makes chemicals for lithium-ion batteries that power electric vehicles.