[COX] War’s Shockwaves…Value of Korean Conglomerates’ Subsidiaries Plu…

An image depicting missiles striking an oil refinery facility / Image generated by Gemini

As the global economy is shaken by the aftermath of the U.S.–Iran war, the value of subsidiary stakes held by major Korean conglomerates has evaporated by trillions of won in just a week. Only Hanwha, which owns numerous defense-related affiliates, saw its value rise. The other 12 holding companies fell without exception. It is a landscape of “many losers and a single winner” shaped by war.

The numbers are brutally clear. Between Feb. 27 and March 6, in just one week, the value of subsidiary stakes held by SK Square collapsed from 153.7 trillion won to 134.2 trillion won. Some 19.5 trillion won vanished like smoke. Samsung C&T also dropped from 107.1 trillion won to 95.8 trillion won, losing 11.3 trillion won. SK shed 5.5 trillion won, while LG lost 4.6 trillion won.

A graph analyzing the change in the current stock valuation of subsidiary stakes held by major groups based on their ownership ratios in the second quarter of 2025. After the U.S.–Iran war, the value of Hanwha’s holdings rose 16.7% due to its defense industry base, while Kolon edged up slightly and all others declined. / Photo: Cox News

The cause lies on the other side of the globe. As tensions between the United States and Iran erupted into conflict, global financial markets were thrown into turmoil, and the shockwaves struck the Korean stock market. As subsidiary share prices wavered, the value of the stakes held by holding companies fell in tandem. Because holding companies generate performance through their subsidiaries, a decline in stake value carries meaning beyond mere numbers. It serves as a barometer of how the market views a company’s future value.

“When war breaks out, defense stocks rise.” In the spring of 2025, this proposition has split the landscape of Korea’s business world.

Amid the chaos, one company is smiling alone: Hanwha. The value of Hanwha’s subsidiary stakes jumped from 29.3 trillion won to 34.2 trillion won, an increase of 4.9 trillion won. In percentage terms, that is a remarkable 16.7% surge. Shares of its defense and shipbuilding affiliates—such as Hanwha Aerospace, Hanwha Systems, and Hanwha Ocean—soared on the back of wartime demand. The fortunes of those on the side where shells are flying and those on the side manufacturing them diverge in this way.

It is a paradoxical scene. War is a disaster for most companies, but an opportunity for those that manufacture weapons. Hanwha’s strategic decision to expand its defense portfolio is now paying off at this moment. That raises an inevitable question: Will Korean conglomerates become more aggressive in securing defense-related affiliates in the future? Is nurturing industries that grow on the back of war truly the right corporate strategy?

Of course, short-term fluctuations in stake values are not everything. However, this data clearly reveals how vulnerable the portfolios of subsidiaries held by Korean holding companies are to global risks. It also exposes how easily Korea’s conglomerate ecosystem—heavily concentrated in semiconductors, IT, retail, and food—can be shaken by geopolitical shocks.

What might executives be thinking right now? Will they simply wait for the war to end, or will they rebuild their portfolios? At this moment, what is most needed is not the speed of reading a crisis, but the courage to change direction.