Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<div class="content-highlight"><p>The <strong>Lotte Group</strong> officially announced today the establishment of Lotte Holdco as well as four company splits: <a href="https://www.smartkarma.com/entities/16050" target="_blank" data-smartkarma-citation="entities:16050:1">Lotte Confectionery Co Ltd (004990 KS)</a>, <a href="https://www.smartkarma.com/entities/2338" target="_blank" data-smartkarma-citation="entities:2338:1">Lotte Shopping Co (023530 KS)</a>, <a href="https://www.smartkarma.com/entities/4843" target="_blank" data-smartkarma-citation="entities:4843:1">Lotte Chilsung Beverage Co (005300 KS)</a>, and <a href="https://www.smartkarma.com/entities/3306" target="_blank" data-smartkarma-citation="entities:3306:1">Lotte Food Co Ltd (002270 KS)</a>. Each of these four companies will be split into an operating company and investment company, respectively. The four investment companies will then be merged into a single Lotte Holdco company.</p></div><p>The final approval of this plan will be made on…</p>

The Lotte Group officially announced today the establishment of Lotte Holdco as well as four company splits: Lotte Confectionery Co Ltd (004990 KS), Lotte Shopping Co (023530 KS), Lotte Chilsung Beverage Co (005300 KS), and Lotte Food Co Ltd (002270 KS). Each of these four companies will be split into an operating company and investment company, respectively. The four investment companies will then be merged into a single Lotte Holdco company.The final approval of this plan will be made on…

Lotte Group Officially Announces Four Company Splits + Establishment of Lotte Holdco

Founder, Riedel Research

David Riedel

Founder

Independent equity research on GEM Markets

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<ul>
<li>For the past 7 years Riedel Research has been issuing company-specific Corporate Governance scores on companies in the Emerging Markets. This service is now being widely used by risk managers, fundamental investors and quant funds.</li>
<li>Our proprietary Corporate Governance (CG) scoring system now covers over 1,725 stocks including over 200 in Korea.</li>
<li>RRG CG scores have a proven ability to highlight the risk of frauds and misstatements by EM companies and a track record of adding alpha. Over the past 5…</li>
</ul>


For the past 7 years Riedel Research has been issuing company-specific Corporate Governance scores on companies in the Emerging Markets. This service is now being widely used by risk managers, fundamental investors and quant funds.
Our proprietary Corporate Governance (CG) scoring system now covers over 1,725 stocks including over 200 in Korea.
RRG CG scores have a proven ability to highlight the risk of frauds and misstatements by EM companies and a track record of adding alpha. Over the past 5…


Corporate Governance Issues in Some of the Most Widely Held Korean Corporates

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

<p>Lotte Group’s four key affiliates <a href="https://www.smartkarma.com/entities/2338" target="_blank" data-smartkarma-citation="entities:2338:1">Lotte Shopping Co (023530 KS)</a>, <a href="https://www.smartkarma.com/entities/16050" target="_blank" data-smartkarma-citation="entities:16050:1">Lotte Confectionery Co Ltd (004990 KS)</a>, <a href="https://www.smartkarma.com/entities/4843" target="_blank" data-smartkarma-citation="entities:4843:1">Lotte Chilsung Beverage Co (005300 KS)</a> and <a href="https://www.smartkarma.com/entities/3306" target="_blank" data-smartkarma-citation="entities:3306:1">Lotte Food Co Ltd (002270 KS)</a> are widely expected to hold separate board meetings this week to vote on plans to break up their business structure into holding and operating companies through equity spinoff. Furthermore, these four holding entities will likely come under <a href="https://www.smartkarma.com/entities/22725" target="_blank" data-smartkarma-citation="entities:22725:1">Hotel Lotte Co Ltd (900281 KS)</a> to make it sole parent entity. If this reorganization process goes through as planned, Lotte Group’s governance structure would become much simplified. Of course, Lotte Group will also break off most of its remaining circular shareholding links. </p>

Lotte Group’s four key affiliates Lotte Shopping Co (023530 KS), Lotte Confectionery Co Ltd (004990 KS), Lotte Chilsung Beverage Co (005300 KS) and Lotte Food Co Ltd (002270 KS) are widely expected to hold separate board meetings this week to vote on plans to break up their business structure into holding and operating companies through equity spinoff. Furthermore, these four holding entities will likely come under Hotel Lotte Co Ltd (900281 KS) to make it sole parent entity. If this reorganization process goes through as planned, Lotte Group’s governance structure would become much simplified. Of course, Lotte Group will also break off most of its remaining circular shareholding links. 

Lotte Group Restructuring Part 1 - Shareholding Status & Investment Opportunity

Thematic (Sector/Industry)

<div><div class="content-highlight"><h2>Japan</h2></div></div><h2>Strong pick-up truck sales in US</h2><p><a href="https://www.smartkarma.com/profiles/940" target="_blank" data-smartkarma-citation="accounts:940">Nick Tanner</a> suggested paying attention to the continued recovery of US pick-up truck sales for <a href="https://www.smartkarma.com/entities/15064" target="_blank" data-smartkarma-citation="entities:15064:1">Toyo Tire &amp; Rubber Co Ltd (5105 JP)</a>, nearly 60% of whose operating profit is coming from North America. However, Nick cautiously pointed out that we might want to closely watch Toyo's profitability this year, which is expected to be slightly lower than that of last year. <a href="https://www.smartkarma.com/profiles/713" target="_blank" data-smartkarma-citation="accounts:713">Mio Kato, CFA</a> also put out a piece on the strong pick-up sales in US. He argued that the ongoing…</p>

JapanStrong pick-up truck sales in USNick Tanner suggested paying attention to the continued recovery of US pick-up truck sales for Toyo Tire &amp; Rubber Co Ltd (5105 JP), nearly 60% of whose operating profit is coming from North America. However, Nick cautiously pointed out that we might want to closely watch Toyo's profitability this year, which is expected to be slightly lower than that of last year. Mio Kato, CFA also put out a piece on the strong pick-up sales in US. He argued that the ongoing…

The Week That Was in NorthAsia@Smartkarma: Trucks, Pachinko, and Life Insurance

Equity Bottom-Up

<ul>
<li>It was reported in Korea's Maeil Economic Daily today that <strong><a href="https://www.smartkarma.com/entities/16050" target="_blank" data-smartkarma-citation="entities:16050:1">Lotte Confectionery Co Ltd (004990 KS)</a></strong> and <strong><a href="https://www.smartkarma.com/entities/2338" target="_blank" data-smartkarma-citation="entities:2338:1">Lotte Shopping Co (023530 KS)</a></strong> plan to spin off their investments stakes of various Lotte affiliates and merge them into one investment holding company. Then, it is expected that Hotel Lotte will become the major owner of the newly created holdco for the investment holdings of Lotte Confectionery and Lotte Shopping. However, this is yet to be finalized.</li>
<li>This is likely to reduce the circular…</li>
</ul>


It was reported in Korea's Maeil Economic Daily today that Lotte Confectionery Co Ltd (004990 KS) and Lotte Shopping Co (023530 KS) plan to spin off their investments stakes of various Lotte affiliates and merge them into one investment holding company. Then, it is expected that Hotel Lotte will become the major owner of the newly created holdco for the investment holdings of Lotte Confectionery and Lotte Shopping. However, this is yet to be finalized.
This is likely to reduce the circular…


Lotte Confectionery & Lotte Shopping: Spin Offs + A Merger

South Korea

Lotte Shopping Co., Ltd. operates department stores and discount stores in South Korea.  The Company retails clothing, household goods, foods and other items through several branches.  Lotte Shopping also operates supermarkets and movie theaters.

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Lotte Shopping Co (023530 KS)

Lotte Group Officially Announces Four Company Splits + Establishment of Lotte Holdco

The Lotte Group officially announced today the establishment of Lotte Holdco as well as four company splits: Lotte Confectionery Co Ltd (004990...

Douglas Kim

Corporate Governance Issues in Some of the Most Widely Held Korean Corporates

For the past 7 years Riedel Research has been issuing company-specific Corporate Governance scores on companies in the Emerging Markets. This...

David Riedel

Lotte Group Restructuring Part 1 - Shareholding Status & Investment Opportunity

Lotte Group’s four key affiliates Lotte Shopping Co (023530 KS), Lotte Confectionery Co Ltd (004990 KS), Lotte Chilsung Beverage Co (005300 KS) and...

Sanghyun Park

The Week That Was in NorthAsia@Smartkarma: Trucks, Pachinko, and Life Insurance

JapanStrong pick-up truck sales in USNick Tanner suggested paying attention to the continued recovery of US pick-up truck sales for Toyo Tire &...

Sanghyun Park

Lotte Confectionery & Lotte Shopping: Spin Offs + A Merger

It was reported in Korea's Maeil Economic Daily today that Lotte Confectionery Co Ltd (004990 KS) and Lotte Shopping Co (023530 KS) plan to spin...

Douglas Kim

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