More and more publicly traded companies are trying to split their business units as a way to increase their corporate value. Companies like Hyundai Heavy Industries, Hanwha Techwin, SeAH Steel, Dongkuk Pharmaceutical, and WeMade Entertainment are expected to see their value rise after spinoffs.
Hanwha Techwin will discuss an agenda on June 15 to spin off its defense (Hanwha Dynamics), energy system (Hanwha Power Systems), and industrial equipment (Hanwha Precision Machine) units and establish privately held entities. After taking the 100-percent stake in the newly created companies, Hanwha Techwin will be able to increase its corporate value.
Hyundai Heavy Industries, which will be relisted on the KOSPI market on May 10 in four independent units, will also see its value rise significantly especially thanks to the increase in the value of its non-shipbuilding business units. Earlier on April 1, the company established the four new entities including Hyundai Heavy Industries (shipbuilding and offshore engineering), Hyundai Construction Machine (construction machinery), Hyundai Electric & Energy Systems (electric and electronic), and Hyundai Robotics (robots). Existing Hyundai Heavy shareholders will receive shares of the four new companies.
The price-to-book ratio of Hyundai Heavy Industries was 0.74. But the ratio for the new companies would rise to 1.0, according to analysts, which means the stock value held by current Hyundai Heavy shareholders would also rise.