According to a survey conducted by the premium news service 'Radar M' of Maeil Business Newspaper targeting financial officers of 50 major domestic companies, 69.4% of responding companies said they would prioritize financial improvement if investment opportunities and financial improvement opportunities arose simultaneously next year.
When asked whether they plan to increase investment next year, 59.2% responded 'no'. Additionally, 55.1% indicated they would set conservative financial strategies for next year, which is higher than those who chose neutral (42.9%) or adventurous (2%).
The CFO of Company A, a listed company in the energy sector, stated, "The domestic market recession is being felt across our economy, and the international uncertainty has increased due to changes in the international situation following the inauguration of the Donald Trump administration and domestic political turmoil," adding, "While we can execute financial plans more aggressively for export-related overseas businesses, we plan to execute financial plans for domestic businesses conservatively."
When asked about plans for mergers and acquisitions (M&A) next year, 75.5% responded 'none', with the most common reason (multiple responses) being 'focus on core business' at 80.6%, followed by 'waiting until macroeconomic uncertainties are resolved' (44.4%).
Min Jun-sun, head of the deal division at Samil PwC, said, "If the period of uncertainty is minimized, we expect outbound and cross-border (overseas company acquisitions) M&A to continue from the second half of next year in the Trump 2.0 era." He added, "By sector, the energy and power infrastructure sectors, which have stable cash flows, seem promising in line with the mega trend of artificial intelligence (AI), as they are sectors with significant upside due to falling interest rates."
Activist funds are also emerging as a variable in financial operations. Among the 50 companies surveyed, 49% expect activist fund movements to be more active next year than this year.
Recently, Align Partners Asset Management, a leading domestic activist fund, secured a 1% stake in Doosan Bobcat and launched a campaign against the merger and comprehensive stock exchange with Doosan Robotics, while the UK-based hedge fund Pelican Capital has called for SK Square to expand shareholder returns.
The atmosphere surrounding these activist fund movements does not feel like someone else's problem for many companies. When asked about their sense of crisis regarding activist funds, 49% of respondents said they feel 'somewhat of a crisis', and 6.1% said they feel 'seriously threatened'. The biggest reasons for feeling a crisis regarding activist funds (multiple responses) were the deepening interference in management activities for private interests, such as board participation (61.5%), and hindrance to corporate decision-making (61.5%).
However, despite the so-called 'value-up' trend, it seems difficult for companies to actively expand shareholder returns. When asked about plans related to value-up next year, 55.1% of respondents said they would be similar to this year. The reasons for not having or planning to reduce value-up plans include prioritizing corporate structure stabilization (45.5%), the need for funds to expand new businesses such as research and development (R&D), facility expansion, and marketing (36.4%), and the need to secure liquidity in preparation for an economic downturn (27.3%).
※ Participating companies in the survey: Kumho Petrochemical, Nexon, Korean Air, Doosan, Dongwon Industries, Lotte Tourism Development, Lotte Shopping, Boryung, Viva Republica (Toss), Samsung SDS, Samsung Biologics, Samsung Electronics, Samchully, Shinsegae International, Shin Young, Socar, NCSoft, E-Mart, Jeju Air, Chungheung Construction, Kakao, Kolon, POSCO E&C, POSCO Future M, POSCO Holdings, Harim Holdings, Hanwha Solutions, Hanwha Aerospace, Hyundai Motor Company, Hyundai Steel, Hyundai GF Holdings, CJ Foodville, DL E&C, GS, GS Construction, HD Korea Shipbuilding & Offshore Engineering, HL Holdings, KT, KT&G, LG CNS, LG Display, LG Energy Solution, LG Innotek, LG Chem, LS Cable, SK Square, SK Eco Plant, SK Innovation, SK Telecom, SPC
[Woo Soo-min / Myung Ji-ye / Oh Dae-seok]
