Exclusive
'Successor to Hanjin Shipping' Eusu Holdings sheds Chinese subsidiaries one after another

[비즈한국] It has been confirmed that Eusu Holdings000700 has consecutively divested its subsidiaries based in China. The core business of Eusu Holdings is logistics, and the recently liquidated subsidiaries were also logistics-related companies. This has raised concerns that its competitiveness in the Chinese market may decline.

The origins of Eusu Holdings lie in Hanjin Shipping. In 2009, Hanjin Shipping split off its shipping business division to establish a new entity named Hanjin Shipping, while the remaining entity changed its name to Hanjin Shipping Holdings. In 2014, Hanjin Shipping Holdings separated from Hanjin Group and changed its name to Eusu Holdings. Choi Eun-young, Chairperson of Eusu Holdings (widow of the late Hanjin Shipping Chairman Cho Soo-ho), is the largest shareholder, currently holding an 18.11% stake. Eusu Holdings engages in businesses including logistics and IT.

Eusu Holdings has recently been divesting its subsidiaries located in Dalian, China. It sold 'Eusu New Life Logistics' in 2023 and recently finalized the liquidation of 'Eusu LPG Supply Chain Management.' Both companies were under the control of Eusu Logistics, a logistics specialist firm 100% owned by Eusu Holdings.

In the past, Eusu Holdings planned to expand its revenue through Eusu Logistics' entry into the Chinese market. Eusu Logistics, formerly known as HJLK, changed to its current name in 2016. At the time of the name change, Eusu Holdings stated, "We plan to enter the Chinese retail logistics market and expand our business base in India and Southeast Asia," adding, "We aim to reach 1 trillion won in sales by 2020."

Eusu Logistics' revenue last year was 319.6 billion won, of which 243.5 billion won came from overseas sales. This figure falls far short of its goals. Eusu Holdings' consolidated revenue for last year was 435.9 billion won, which is less than half of the 1 trillion won target set by Eusu Logistics.

However, this does not mean Eusu Holdings is giving up on the Chinese market. Eusu Holdings still operates 'Eusu Logistics Shanghai' and 'Eusu Trading' in Shanghai, as well as a subsidiary in Shenzhen. The Shanghai and Shenzhen subsidiaries of Eusu Logistics recorded revenues of 54.1 billion won and 16.9 billion won, respectively, last year. Eusu Trading did not generate any revenue. The combined revenue of the Eusu Logistics Shanghai and Shenzhen subsidiaries is approximately 71 billion won, accounting for over 20% of Eusu Logistics' total revenue of 319.6 billion won, which is not a negligible figure.

Nevertheless, it is true that the company's footprint in the Chinese market has shrunk with the liquidation of the Dalian-based entities. Eusu New Life Logistics contributed to performance by generating over 10 billion won in revenue in 2022, the year before its sale. However, revenue from other Chinese subsidiaries has not seen a significant increase. The revenue for the Eusu Logistics Shanghai subsidiary was 73.7 billion won in 2022, 41.3 billion won in 2023, and 54.1 billion won in 2024. The Shenzhen subsidiary's revenue also failed to exceed 2022 levels, recording 19.2 billion won in 2022, 10.2 billion won in 2023, and 16.9 billion won in 2024.

While Eusu Holdings also operates an IT business, the proportion of its logistics business remains overwhelming. This means that the performance of Eusu Logistics has a significant impact on Eusu Holdings' overall results. Under these circumstances, there are concerns that the downsizing of Eusu Logistics by clearing out some of its Chinese subsidiaries could lead to a decline in overall sales.

BizHankook attempted to reach Eusu Holdings by phone to obtain their position on the matter, but there was no response.