Cho Hyun-sang, part of the family that controls the South Korean industrial conglomerate Hyosung Group, broke into the billionaire ranks for the first time, as shares of an industrial materials subsidiary, Hyosung Advanced Materials, soared more than 400% since the start of the year.
Hyosung Advanced Materials makes most of its money from selling tire cords, which help strengthen tires, and accounted for 54% of the Seoul-based company’s total revenue in the second quarter of this year. It reported that revenue rose 131% to 8.7 trillion won ($7.4 billion) in the second quarter due to restocking demand from car makers, while net profit was 1 trillion won ($855.6 million), up from a loss of 400 billion won ($340 million) in the same period last year.
More importantly for investors optimistic about environmentally friendly cars, Hyosung Advanced Materials also makes carbon fiber. The company claims it is the only Korean producer of the strong, lightweight material that’s used in hydrogen fuel-cell vehicles—the lesser-known cousin of electric vehicles. Hydrogen-powered cars use hydrogen gas from its fuel tank and combines it with oxygen from the air to produce electricity, emitting only water vapor from the tailpipe.
Carbon fiber is the core material of the fuel tank of hydrogen cars, according to Hyosung Advanced Materials. The company, which was spun off and listed in 2018, said it plans to invest 1 trillion won (about $850 million) annually through 2028 to expand its sole carbon fiber plant, in the southwestern Korean city of Jeonju. Hyosung Advanced Materials did not announce any plans to build new carbon fiber plants.
Shares of its parent company, Hyosung Corp., and other group companies also rose on investor optimism for hydrogen technology. Since the start of the year, shares of Hyosung Chemical, which is preparing to construct the world’s largest liquid hydrogen factory, are up about 160%; Hyosung Heavy Industries, which is building hydrogen charging stations, rose around 25%; and Hyosung Corp. increased more than 60%.
Promoting environmentally friendly projects, including hydrogen cars, have been a top priority for South Korean President Moon Jae-in. Last year, the Korean government announced it will invest 114 trillion won ($95 billion) over five years on green projects, including aiming to have 200,000 hydrogen cars on the roads by 2025, up from 5,000 in 2020. In February, Korea announced a $43 billion plan to build the world’s largest wind power plant by 2030, propelling Gim Seong-gon, the founder of Korean wind tower maker CS Wind, into the billionaire ranks.
Cho, 49, is the second-largest shareholder of Hyosung Advanced Materials, with just over a 12% stake. The largest shareholder is Hyosung Corp. with around 21%. Cho is also the second-largest shareholder in the parent company, with about 21%, and serves as vice chairman. His other assets include stakes in Hyosung Chemical and Hyosung Heavy Industries, as well as a clutch of private companies such as ATM maker Hyosung TNS, car dealership Class Hyosung and real estate company Shin Dong Jin. Combined, Forbes estimates his net worth at $1.4 billion.
Cho is the youngest of three sons of Seok-rae, the honorary chairman of Hyosung Corp. Seok-rae is the eldest son of its late founder, Hong-jai. The Hyosung Group traces its history to 1966, when Hong-jai founded Tongyang Nylon, which focused on fibers and textiles.
Hyun-sang, the new billionaire, first made it onto Korea’s 50 Richest list in 2017 with a net worth of $700 million. He dropped off the list the following year as Hyosung Corp. shares slumped after a corporate restructuring that included spinning off four businesses (Hyosung Advanced Materials, Hyosung Chemical, Hyosung Heavy Industries and Hyosung TNC). Hyun-sang’s older brother, Hyun-joon, who serves as chairman of Hyosung Corp., last appeared on the Korea’s 50 Richest list in 2018 with a fortune of just over $1 billion. Hyun-joon, who received a three-year suspended jail sentence in November last year for embezzlement and breach of trust, also benefited from the rise in Hyosung shares and his fortune is back above $1 billion.
Before joining the family business in 2000, Hyun-sang, a graduate of Brown University, was a consultant at Bain & Company and worked at Japanese telecom operator NTT.
Elsewhere in Korea, Lee Sang-ryul, founder and co-CEO of chemicals company Chunbo, also recently became a billionaire on the back of growing excitement for environmentally friendly vehicles. Lee’s company makes chemicals for lithium-ion batteries that power electric vehicles.