The growth potential of listed medium-sized corporations has deteriorated in the first quarter of this year. The increase in sales and total assets has decreased compared to the previous year. With the increase in long- and short-term borrowings, the stability of corporations has also weakened.
According to the results of the '2025 Q1 Management Analysis of Listed Medium-Sized Corporations' released by the Federation of Middle Market Enterprises of Korea (FOMEK) on the 4th, the sales growth rate, an indicator of growth potential for listed medium-sized corporations, was 1.3%, a decrease of 2.2 percentage points (P) compared to 3.5% in the same period last year. The total asset growth rate during the same period was 3.8%, representing a decline of 2.4 P.
This analysis was based on the financial information from 992 listed medium-sized corporations among the 5,868 medium-sized corporations as of the 2023 settlement of account, covering the period from Q1 2024 to Q1 2025.
By sector, the sales growth rate in manufacturing recorded a rise of 0.5 P to 1.5% compared to the same period last year. However, due to a decrease in investment assets and other non-current assets, the total asset growth rate analyzed was down by 1.1 P to 4.2%. The sales growth rate in non-manufacturing showed a decline of 8.8 P to 0.8%, while the total asset growth rate decreased by 5.2 P to 2.9%.
Profitability indicators showed mixed results. The operating profit margin for sales in Q1 was 6.8%, an increase of 0.5 P compared to the same period last year, while the net profit margin before tax was 8.6%, a decrease of 0.6 P.
By sector, the operating profit margin for sales in manufacturing confirmed a rise of 0.6 P to 5.8%, while the net profit margin before tax decreased by 0.8 P to 7.3%. In non-manufacturing, the operating profit margin for sales was 8.9%, an increase of 0.3 P, but the net profit margin before tax fell to 11.5%, a decrease of 0.3 P.
A representative of the Federation of Middle Market Enterprises of Korea noted, "Both manufacturing and non-manufacturing saw a slight increase in operating profit, but due to the rise in non-operating expenses such as equity method losses and foreign exchange losses, the net profit before tax has decreased."
With the increase in long- and short-term borrowings, the stability of listed corporations has weakened. The debt ratio of listed medium-sized corporations recorded 67.1%, a decrease of 0.7 P compared to the same period last year, but the dependence on borrowing funds rose to 13.0%, an increase of 0.3 P.
By sector, the debt ratio in manufacturing recorded 68.3%, a decrease of 0.3 P compared to the same period last year, while the dependence on borrowing funds increased to 13.6%, an increase of 0.1 P. The debt ratio in non-manufacturing was also confirmed to have decreased by 1.4 P to 64.8%, but the dependence on borrowing funds rose to 11.8%, an increase of 0.8 P.
A representative of the Federation of Middle Market Enterprises of Korea added, "Although the debt ratio improved due to an increase in capital such as retained earnings, the significant rise in long- and short-term borrowings has likely increased the instability of listed medium-sized corporations."
Lee Ho-jun, Vice President of the Federation of Middle Market Enterprises of Korea, emphasized, "As protectionist tendencies expand, supply chain instability worsens, and domestic demand weakens, the management conditions for medium-sized corporations have significantly deteriorated over the past year," and added, "There needs to be a proactive review of laws and systems that exacerbate management difficulties, such as corporate tax increases, commercial law amendments, and the yellow envelope law, as well as the establishment and operation of policy support and public-private cooperation systems to revitalize corporations, which are key to growth."