[비즈한국] Hanwha has officially launched its new holding company, Hanwha M&S. With the inception of Hanwha M&S, which will oversee the group’s Tech and Life divisions, attention is turning to the role of President Kim Dong-seon. While he has been credited with achieving some successes in the tech sector, boosting the profitability of the Life division has emerged as his new challenge.
Overseeing 57 Companies Including Hanwha Vision, Robotics, Galleria, and Ourhome
On the 3rd, Hanwha Machinery & Service Holdings (Hanwha M&S) held a ceremony at The Plaza in Jung-gu, Seoul, to mark its official launch. Hanwha M&S was established through the spin-off of Hanwha Corporation. During the board meeting held that day, major agenda items were approved, including the appointment of executives such as the CEO, the establishment of various committees, and the enactment of internal regulations.
Hanwha M&S operates through two main pillars: the Tech division and the Life division. The Tech division's "Solutions" portfolio includes Hanwha Vision, Hanwha Semitech, Hanwha Momentum, and Hanwha Robotics, while the Life division's "Solutions" portfolio includes Hanwha Hotels & Resorts, Hanwha Galleria, and Ourhome. Including subsidiaries and overseas entities, the group consists of a total of 57 companies, with consolidated revenue of approximately 6 trillion won and total assets of about 11.3 trillion won as of the end of 2025.
Industry experts believe that the launch of Hanwha M&S marks the beginning of President Kim Dong-seon’s independent management system. Kim had previously served as the head of future strategy for seven affiliates within Hanwha’s Tech and Life sectors. Moving forward, as President of Future Strategy at Hanwha M&S, he will lead the growth strategies for both divisions.
The launch of Hanwha M&S has also clarified the division of roles among the third-generation heirs of Hanwha Group. Previously, in an executive reshuffle, the group promoted Kim Dong-seon from Executive Vice President to President, and promoted Vice Chairman Kim Dong-kwan and President Kim Dong-won to Senior Vice Chairman and Vice Chairman, respectively.
Accordingly, Senior Vice Chairman Kim Dong-kwan oversees the group's core businesses such as defense, shipbuilding, aerospace, and energy, while Vice Chairman Kim Dong-won heads the financial sector. With President Kim Dong-seon dedicated to the tech and life businesses, the independent management system of the three Hanwha brothers is now effectively complete.
A Hanwha M&S representative stated, “We expect to resolve the conglomerate discount and accelerate investment and business expansion in the tech and life divisions,” adding, “We will strengthen our competitiveness so that both businesses can establish themselves as new growth axes for the group.”
Some Success in Semiconductors, but Profitability in the Life Sector Remains a Challenge
Through this spin-off, Hanwha aims to resolve the conglomerate discount and boost corporate value by separating the defense, shipbuilding, and finance businesses from the tech and life businesses. However, for these expectations to materialize, the performance of the subsidiaries under Hanwha M&S must support them. This is why the launch of Hanwha M&S is seen as both a new opportunity and a litmus test for President Kim to prove his management capabilities.
Since Hanwha M&S focuses on a Tech division centered on semiconductors and robotics, and a Life division focused on retail, hotels, and food and beverage, President Kim faces the task of simultaneously boosting growth and profitability in both areas. According to Hanwha, the Tech division has already achieved some tangible results.
Regarding President Kim’s promotion, Hanwha M&S explained, “He was promoted to President in recognition of various achievements centered on the Tech division, such as the successful entry into the semiconductor equipment market through large-scale orders for HBM TC bonders, and the pioneering of emerging global markets including the Middle East and India.”
On the other hand, the Life division has yet to show clear results in profitability improvement compared to its investment and outward expansion. Hanwha Galleria recorded 575.2 billion won in revenue and 9.4 billion won in operating profit last year, but its operating margin stood at only 1.6%. Ourhome also posted a record revenue of 2.4497 trillion won, but its operating profit fell 9.3% from the previous year to 80.4 billion won.
Hanwha Hotels & Resorts saw significant performance improvements last year, with consolidated revenue of 2.376 trillion won and an operating profit of 60.8 billion won. However, since the effect of incorporating Ourhome is reflected to a large extent, it remains necessary to monitor whether the company’s own business profitability improves this year.
The market is particularly focused on the recovery of profitability at Hanwha Galleria, a core subsidiary of the Life division. As President Kim has been at the forefront of management, personally leading business expansion, future performance will likely serve as a benchmark for both his managerial achievements and the growth potential of the Life division.
The first "report card" to be received after the launch of Hanwha M&S is the sale of Five Guys. Five Guys, which President Kim introduced to the Korean market in 2023, entered the sale process last July after successfully turning a profit. Since then, H&Q Equity Partners has been selected as the preferred bidder, and the parties are currently in the process of finalizing the main contract after signing a memorandum of understanding (MOU).
The market suggests a sale price in the range of 60 to 70 billion won. The final sale price and the scale of investment recovery are expected to demonstrate President Kim’s investment performance. A Hanwha Galleria official said, "Due diligence is currently underway, and we expect the sale process to be completed in the second half of this year."
In the medium to long term, the success of the real estate development business is the key. In July, Hanwha Galleria decided to purchase a site in Sinsa-dong, Gangnam-gu, Seoul, for 236.7 billion won, marking its first foray into residential development. This site was previously slated for the development of a high-end residential complex called "The Peak Dosan," but it went up for public auction after the developer failed to secure project financing (PF).
Industry insiders view Hanwha Galleria’s move into real estate development as an effort to secure new growth engines beyond department stores and food services. A retail industry official remarked, "There is a saying that the end of retail is ultimately real estate, which highlights the close relationship between the two sectors. It appears Hanwha Galleria is trying to expand its business scope in a similar direction."
However, as this is Hanwha Galleria’s first residential development project, some in the market argue that it must prove both its execution capabilities and project viability. Given the large capital required and the limited demand for ultra-luxury housing, the success of financing and sales will likely determine the project's profitability.
A Hanwha Galleria official stated, "We are examining various ways to utilize the site near Dosan Park. Currently, we are discussing the business direction with a focus on developing a high-end residential complex." They added, "Following the launch of Hanwha M&S, we plan to focus on strengthening the expertise of each subsidiary while enhancing synergies between them to boost the competitiveness of the Life division."