Large Korean companies that underwent extensive deleveraging by shedding redundant debt, workforce and assets have been rewarded by stock gains as investors focused on their long-term viability.

According to market data provider FnGuide and the securities industry, companies affiliated with Hyundai Heavy Industries gained 64.3 percent in market capitalization growth on average as of Dec. 1 from the beginning of the year, the biggest gain among top 25 business groups. Steelmaking Posco Group running six affiliates came next with a 47.4 percent gain, followed by Doosan Group with six units with a 29.3 percent gain.

Parent companies Hyundai Heavy Industries Co., Posco and Doosan Heavy Industries & Construction Co. had all been on a downhill since early 2012. They have rebounded this year.

Hyundai Heavy Industries which in 2010 added Hyundai Corp. and Hyundai Oilbank Co. stopped expanding with the last purchase being Hi Gold Ocean Kmarin No.8 Ship Investment Co. in 2012. Faced with liquidity woes from a prolonged slowdown in the shipbuilding industry, Hyundai Heavy Industries sold its stake in Hyundai Motor Co. at around 500 billion won ($427.9 million) in September last year and is working to sell Hyundai Avancis Co. next year. The conglomerate shed about 3,700 workers in the first nine months this year. Recently, it unveiled a plan to break up the firm into six separate companies. Deleveraging strengthened its balance sheet, cutting its debt to 7 trillion won by June from 9 trillion won six months ago. Its debt ratio dropped to 182 percent from 200 percent.

Posco also went on voluntary restructuring to stay competitive in a market overwhelmed by Chinese producers and stopped expansion since its last acquisition of Posco Power in 2014. It also reduced workforce and shed money-losing non-core companies. The stock has hit a 520-month high led by foreign buying.

Doosan Heavy Industries, which had become leaner through earlier restructuring, was able to afford purchase of U.S.-based 1Energy Systems, energy storage system provider in July. Still, it kept up selling redundant businesses, including machine tools unit division of Doosan Infracore for 1.13 trillion won.

Shares of Hyundai Heavy Industries closed Wednesday at 153,500 won, down 2.5 percent, or 4,000 won from the previous closing. Posco ended at 271,000 won, up 1.12 percent, or 3,000 won. Doosan Heavy Industries & Construction finished at 257,000 won, down 2.7 percent, or 700 won.

By Moon Il-ho

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]