Korean firms in the automotive, battery, and biotech sectors are bringing hope to the economy during the crisis with their record-breaking sales performance. LG Energy Solution's annual operating profit increased by more than 50%, surpassing 1 trillion won for the first time. Samsung Biologics also recorded its highest sales of over 3 trillion won in the domestic pharma and biotech industries. The combined sales of Hyundai Motor Company and Kia also reached a new high of over 200 trillion won. As the global economic slowdown affects many businesses, their impressive results stand out even more.
Despite the crisis, these firms' strong performances are attributed to their sustained, long-term investments. LG Energy Solution foresaw the potential of the battery industry and invested 5.3 trillion won in R&D over the past decade. Samsung Biologics continued its investments, building a fourth factory worth 1.74 trillion won in Songdo, Incheon, even during increased business uncertainty due to COVID-19.
Superior technological innovation is also a critical factor in their success. Hyundai Motor Group has solidified its position by advancing technology in future cars, including EVs, and increasing global sales through high-value-added models. Unlike other global automakers' sales decline due to semiconductor supply shortages and reduced demand, Hyundai Motor Company's technological prowess has positioned it as one of the "Big 3" in the automobile industry. The company has transformed from being known as a "refrigerator on wheels" in the European market to a technological leader in the industry.
While some firms are performing well, concerns are growing over a slowdown in the overall performance of Korean companies. Nineteen of 27 listed firms that reported Q4 earnings last year fell short of the securities company consensus. Both Samsung Electronics and LG Electronics recorded earnings shocks, and red flags were raised over the Q4 performance of major export industries such as oil refining, petrochemicals, and steel. Companies that performed well last year may not be able to guarantee their performance this year due to negative factors such as the U.S. Inflation Reduction Act (IRA).
The solution to overcoming the crisis is a consistent investment and technological innovation. Despite challenging conditions, staying focused on the future and making strategic investments to seize the rebound opportunity when the economy recovers is important. Companies must be resilient, focus on quality, and continue to compete. The government must also support businesses through regulatory reform to allow free investment.