This article was published on the capital markets service Signal at 3:06 p.m. on August 21, 2026.
AK Holdings has seen a sharp drop in the dividends it receives from affiliates after selling Aekyung Industrial, according to investment banking sources. While the sale helped the group put out an immediate fire, the aftereffects of parting with a profitable affiliate are now showing up in the numbers. Analysts say a return to normal earnings at Jeju Air, the group's flagship affiliate, is urgently needed to stabilize Aekyung Group's finances.
AK Holdings sold its entire 47.3% stake in Aekyung Industrial to Taekwang Industrial at the end of March this year, receiving 317.2 billion won ($228 million), according to investment banking sources. The proceeds were used to repay debt. During the first half, the company repaid 471.8 billion won in short-term borrowings on a standalone basis and took on 105 billion won in new loans, for a net repayment of 366.8 billion won.
As a result, its standalone debt-to-equity ratio fell sharply to 53% in the first half of this year from 132% a year earlier. Given that the ratio had climbed to 166% at the end of last year, the effect of the affiliate sale was dramatic.
The price for securing a large amount of liquidity all at once came in the form of reduced dividends. AK Holdings' standalone dividend income fell about 73% to 4.1 billion won in the first half of this year from 15.1 billion won a year earlier, because Aekyung Industrial, along with Aekyung Chemical, had been one of the holding company's two main dividend sources.
In the first half of last year, Aekyung Industrial's dividend of 6.9 billion won accounted for 46% of the total. Aekyung Chemical's dividend of 8.2 billion won made up the largest share, while Jeju Air paid no dividend at all. In the first half of this year, only Aekyung Chemical paid a dividend, of 4.1 billion won — about half the amount from a year earlier. No dividend came from Aekyung Industrial.
The decline in dividend income led to a deterioration in the holding company's earnings. AK Holdings' operating revenue consists of dividend income, management advisory fees and brand royalties. Standalone operating revenue in the first half fell to 12.1 billion won, about half the 22 billion won recorded in the same period last year. Operating profit plunged 96% to 500 million won from 14.3 billion won, and here too the absence of Aekyung Industrial's dividend was one of the main causes.
While the dividends AK Holdings receives from affiliates fell, the pressure to pay dividends to its own shareholders grew. The gain on the sale was reflected in the books, lifting standalone retained earnings to 379.4 billion won from 166.6 billion won a year earlier. Contrary to the liquidity that swelled on paper, however, standalone cash and cash equivalents amounted to just 41.9 billion won. AK Holdings had earlier set out a dividend policy — as part of its plan to raise corporate value — that applies the higher of a 2.5% dividend yield or a 35% payout ratio, based on its standalone financial statements.
Jeju Air and Aekyung Chemical now remain as AK Holdings' main affiliates. It is a painful point that Jeju Air, which Aekyung Group had long invested in nurturing, continues to see its earnings worsen. On a standalone basis, Jeju Air's revenue in the first half rose 38% from a year earlier to 939.9 billion won, but it posted a net loss of 39.2 billion won. Its equity fell to 211.8 billion won from 277.3 billion won.
Aekyung Chemical is now effectively left to shoulder the gap left by Aekyung Industrial on its own, but the problem is that Aekyung Chemical too has recently been suffering from weaker results. Aekyung Chemical posted standalone revenue of 694.9 billion won, up 18% from a year earlier, but recorded a net loss of 21 billion won.
An investment banking source said, "With the looming debt problem needing an urgent fix, selling Aekyung Industrial was a drastic remedy for Aekyung Group." The source added, "The immediate fire has been put out, but the financially difficult situation continues, so improving earnings at Jeju Air and Aekyung Chemical is urgent."
