[비즈한국] Shinyoung Group, a comprehensive real estate company known for its apartment brand Shinyoung G-Well, was designated as a large business group in 2022. In May of this year, Shinyoung, the de facto holding company of the group, absorbed and merged with its affiliate Shinyoung Plus, which strengthened the control of Director Jung Moo-kyung (32), the eldest son of Chairman Jung Choon-bo, the founder and controlling shareholder. The number of affiliates under Shinyoung has decreased from five to four, and the industry is already paying close attention to the possibility that Shinyoung may continue to merge with other affiliates to further solidify the second-generation owner's control.
Eldest Son, Director Jung Moo-kyung, ‘Controls’ Shinyoung Daenong Development and Brighton Asset Management
Changes in the owner's shareholdings occurred in May when Shinyoung, the de facto holding company of Shinyoung Group, absorbed and merged with Shinyoung Plus, one of its five affiliates. The shareholding ratio, which was 90.4% for Chairman Jung Choon-bo and 1.48% for his eldest son, Director Jung Moo-kyung, shifted after the merger; Chairman Jung’s stake fell to 79.73%, while Director Jung, who was the largest shareholder (48%) of Shinyoung Plus, saw his stake rise to 13.59%. In effect, Shinyoung strengthened the second-generation owner's control through the merger of an affiliate. Industry experts analyzed this merger as the official start of the succession process.
Director Jung Moo-kyung, who is identified as the likely successor, is known to hold stakes in Shinyoung Daenong Development and Brighton Asset Management in addition to Shinyoung. Director Jung holds a 100% stake in Shinyoung Daenong Development, which is reportedly the only Shinyoung affiliate not under the direct influence of his father, Chairman Jung. Shinyoung Daenong Development has a capital of 8.3 billion KRW, and due to recent poor performance, its total equity has fallen to negative 17.2 billion KRW, resulting in a state of capital impairment.
Shinyoung Daenong Development's recent revenue was 3.3 billion KRW in 2021, 1.1 billion KRW in 2022, and 75.2 billion KRW in 2023. Net losses were 2.4 billion KRW in 2021, 6.7 billion KRW in 2022, and 17.4 billion KRW in 2023.
Director Jung Moo-kyung is also the second-largest shareholder of Brighton Asset Management, holding a 42.55% stake. The largest shareholder is Chairman Jung Choon-bo, who holds 57.45%. In effect, Brighton Asset Management is a company owned by the father-son duo. Three years ago, Shinyoung Group acquired STL Asset Management and renamed it Brighton Asset Management. It has a capital of 5.1 billion KRW, and its current total equity is around 4.7 billion KRW.
Brighton Asset Management's revenue was 2.3 billion KRW in 2021, 2.8 billion KRW in 2022, and 2.1 billion KRW in 2023. Net profits were 370 million KRW in 2021, negative 50 million KRW in 2022, and negative 260 million KRW in 2023. Its revenue and deficit scales are lower than those of Shinyoung Daenong Development.
Although Shinyoung Daenong Development and Brighton Asset Management are not performing well recently, given that Director Jung Moo-kyung holds significant stakes, their absorption into Shinyoung, like Shinyoung Plus, would inevitably increase the control of the likely successor. However, as Director Jung is still young and his stake in the holding company has recently increased, it does not appear that there is an urgent push for further stake acquisition at this time.
Chairman Jung’s Two Daughters Hold Significant Stakes in Shinyoung Asset and SL Platform
Chairman Jung Choon-bo has two more daughters above Director Jung Moo-kyung: Jung Min-kyung and Jung Shin-jae. The two daughters are not known to be affiliated with the group and are understood to hold stakes in the affiliates Shinyoung Asset and SL Platform.
In Shinyoung Asset, Min-kyung and Shin-jae each hold a 24% stake, while Shinyoung holds 31% and Chairman Jung holds 21%. Established as a real estate leasing and investment consulting firm with a capital of 1 billion KRW, its revenue reached 7.2 billion KRW in 2021, 6.16 billion KRW in 2022, and 3.7 billion KRW in 2023. Its net profits were 5.1 billion KRW in 2021, 9.4 billion KRW in 2022, and 13.5 billion KRW in 2023, showing a relatively sound financial status. Total equity is around 27.1 billion KRW.
SL Platform’s largest shareholder is Chairman Jung’s second daughter, Jung Shin-jae, who holds a 44.47% stake. Chairman Jung holds 3% and Shinyoung holds the remaining 20.35%. Engaging in real estate development and management, the company has a capital of 5.3 billion KRW. Among Shinyoung’s four affiliates, it has the highest revenue. Revenue was 43.3 billion KRW in 2021, 50.8 billion KRW in 2022, and 48.8 billion KRW in 2023, while net profits were 1.9 billion KRW in 2021, 2.2 billion KRW in 2022, and 1.9 billion KRW in 2023. Total equity is around 13.5 billion KRW.
With Chairman Jung Choon-bo’s three children holding stakes in the four affiliates, and given that the merger with Shinyoung Plus has already bolstered the second-generation owner's control, there is speculation that the remaining affiliates could also be used to further consolidate power. Shinyoung Group was contacted several times for comment, but we were unable to reach them.