[COX] Holding company values melted by Middle East tensions… Only Hanw…

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Korea’s business community is facing a massive geopolitical wave. Gunfire echoing from the Middle East has not subsided; instead, fears of full-scale war are spreading. Uncertainty in global financial markets is tightening its grip on the Korean stock market.

In particular, the performance of large conglomerate holding companies — the backbone of the Korean economy and the apex of corporate governance — has been disastrous over the past three weeks. The record plunge in the value of subsidiary stakes goes beyond a simple stock correction, exposing the vulnerability of Korea’s export-dependent economy to external shocks.

₩21 trillion wiped out — the numbers prove a ‘cruel March’

The cold numbers must be confronted first. Between February 27 and March 13 — barely over two weeks — the value of SK Square’s subsidiary holdings plunged from ₩153.7 trillion to ₩132.2 trillion. A staggering ₩21.5 trillion in capital effectively vanished amid market panic. Key affiliate SK hynix and others were hit hard by concerns over global supply-chain instability and weakening IT demand.

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This is not SK’s tragedy alone. Samsung C&T, which plays the role of the de facto holding company for Samsung Group, also saw its stake value shrink from ₩107.1 trillion to ₩93.7 trillion during the same period, surrendering its membership in the “₩100 trillion club.” Major holding companies of the big four conglomerates — including SK (down ₩7.9 trillion) and LG (down ₩5.5 trillion) — failed to escape the accelerating downturn. Mid-tier holding firms such as Harim Holdings and Hanjin KAL, sensitive to domestic consumption and air logistics, also suffered multi-trillion-won declines, sending their market capitalizations tumbling.

When market capitalization falls in tandem with subsidiary value, it signals that investors are turning pessimistic not only about current earnings but also about future growth engines. Indiscriminate sell-offs across sectors — semiconductors, IT, retail, aviation, and food — are exerting powerful downward pressure on Korea’s entire corporate landscape.

The paradox of ‘security’: Hanwha’s defense line stood alone

Amid this market chaos, one company traced a distinctly different trajectory and successfully held its defensive line: Hanwha. The value of Hanwha’s subsidiary stakes rose from ₩29.3 trillion on February 27 to surpass ₩34 trillion in early March. Although it eased slightly to ₩33.8 trillion as of March 13, the figure still represents a gain of more than 15 percent compared to three weeks earlier. While other holding companies bled, Hanwha managed to smile.

The secret lies in the “paradox of geopolitical crises.” The more unstable the world becomes, the more valuable industries that manage and neutralize such instability become. As signs of prolonged conflict in the Middle East emerged, market attention immediately shifted to Hanwha’s “defense industry triangle.” The land-sea-air portfolio spanning Hanwha Aerospace, Hanwha Systems, and Hanwha Ocean firmly supported the group’s overall stake value. “K-defense” has evolved from a mere export champion into the final bulwark safeguarding the group’s destiny.

The rebound of LS, a powerhouse in power infrastructure, is also noteworthy. Although LS showed signs of decline in early March, it recovered to around ₩15.4 trillion as energy security concerns came to the forefront. War inevitably creates imbalances in energy supply and demand, which in turn drives upgrades to power grids and expanded infrastructure investment — a dynamic the market has clearly learned to anticipate.

An era where portfolios define survival

The record of the past three weeks poses the most uncomfortable yet urgent question to Korean companies: “Can your current portfolio withstand the next shock?”

In the past, Korean corporate growth was built on the tailwinds of global division of labor and free trade. Today’s world, however, prioritizes “security” over “efficiency” and “self-reliance” over “cooperation.” With massive risks such as war and supply-chain breakdown becoming routine, the latest data demonstrates how portfolios concentrated in specific industries can collapse like sandcastles.

Markets are ruthless. They do not reward those who simply wait for crises to pass. The turnarounds shown by Hanwha and LS suggest that corporate stature may increasingly depend on whether firms possess the “muscle” to manage geopolitical risks and convert them into business opportunities.

Management is often compared to surfing waves. But the waves we face today are not temporary swells — they resemble climate change raising the sea level itself. Passive management that merely hopes for tariff deals or the cessation of gunfire in the Middle East has reached its expiration date.

The most painful lesson left by March’s data is the “naked exposure of vulnerability.” Stock prices can fall and rise again, but the collapse of subsidiary stake value — the very foundation of corporate valuation — signals structural flaws.

Hanwha’s reputation as a bold strategist stands out not only because it performed well, but also because others failed to prepare. Before the next wave arrives, Korean companies must rebuild not simple stock-price management tactics, but a resilient “security-driven portfolio” capable of withstanding geopolitical upheaval.