 |
HD Hyundai Group (Photo courtesy of HD Hyundai Group) |
[Alpha Biz= Kim Jisun] HD Hyundai is facing mounting financial pressure as demands intensify on multiple fronts, ranging from the Korea–U.S. shipbuilding cooperation project known as MASGA, to large-scale domestic investment, regional job creation, and long-term growth initiatives centered on robotics.
While the projects are seen as strategically critical—not only for the group but also for South Korea’s shipbuilding industry as a whole—concerns are growing that HD Hyundai’s holding company may be reaching the limits of its financial capacity. The group’s total borrowings exceed KRW 14 trillion, raising questions about its ability to independently fund future growth initiatives.
Industry observers increasingly point to a potential initial public offering (IPO) of HD Hyundai Robotics as a key solution. Much like Hyundai Motor Group’s “Atlas” robotics strategy, HD Hyundai is repositioning robotics as a core growth engine—this time with shipyards as the primary deployment arena. An IPO could provide both capital and long-term valuation upside, analysts say.
According to NICE Credit Rating, HD Hyundai’s standalone net debt rose from KRW 2.1 trillion at the end of 2021 to KRW 2.9 trillion as of March 2025, driven by headquarters construction, additional affiliate stake acquisitions, and rising financing costs. While the group’s net debt ratio has improved, the absolute level of debt remains substantial.
Investment obligations are also expanding. HD Hyundai continues to fund the MASGA project, a flagship Korea–U.S. shipbuilding cooperation initiative, including a USD 5 billion investment fund formed with U.S.-based private equity firm Cerberus Capital Management and Korea Development Bank.
Chairman Chung Ki-sun has outlined plans to acquire and upgrade U.S. shipyards, develop advanced vessels, and strengthen shipbuilding supply chains. HD Hyundai is also pursuing joint construction of next-generation naval logistics vessels with Huntington Ingalls Industries and discussing unmanned vessel projects with U.S. defense AI firm Anduril.
Labor-related costs are rising as well. HD Hyundai Heavy Industries recently concluded a wage agreement offering industry-leading compensation, alongside job security commitments. Additional investments are planned to expand regional employment, including the development of AI-based smart shipyards and testing centers in South Jeolla Province’s Daebul Industrial Complex.
Against this backdrop, HD Hyundai Robotics has become a focal point of debate. Minority shareholder groups have raised concerns about potential value dilution if the robotics unit is listed separately, given expectations that its enterprise value could exceed KRW 7 trillion. However, analysts counter that HD Hyundai Robotics currently accounts for just 0.3% of the holding company’s revenue, limiting any dilution risk.
Industry consensus suggests that an IPO may be the only viable route to secure the billions of won required to scale the robotics business. HD Hyundai Robotics raised KRW 180 billion in pre-IPO funding last October from Korea Development Bank and KY Private Equity, but failure to proceed with a listing could increase financial liabilities under existing investment agreements.
HD Hyundai Robotics is developing domestically produced industrial robots aimed at replacing high-cost foreign alternatives in the ultra-large robot segment. While pilot testing is underway at production sites, significant capital will be required to move toward mass production.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
