Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<ul><li>We highlight 25 Korean companies that are seeking to find new owners through M&amp;A in 2018. Key sectors of M&amp;A in Korea in 2018 include consumer, financials, and industrial. Our analysis is based on the publicly available information. Of the 25 companies, 10 are publicly listed companies and the remaining companies are private companies or business units of public companies. </li><li>The top five Korean companies up for sale in 2018 (in terms of size) include ADT Caps, Daewoo E&amp;C, Coway, Dongsuh F&amp;B, and CJ Healthcare. </li><li>In 2018, there could be a greater interest from the Chinese companies in the Korean M&amp;A market, which could help to accelerate some of the M&amp;A activities of the companies listed below. In 2017, many Chinese companies avoided acquiring Korean companies due to the political pressure from the Chinese government arising from the THAAD conflict</li></ul>

We highlight 25 Korean companies that are seeking to find new owners through M&amp;A in 2018. Key sectors of M&amp;A in Korea in 2018 include consumer, financials, and industrial. Our analysis is based on the publicly available information. Of the 25 companies, 10 are publicly listed companies and the remaining companies are private companies or business units of public companies. The top five Korean companies up for sale in 2018 (in terms of size) include ADT Caps, Daewoo E&amp;C, Coway, Dongsuh F&amp;B, and CJ Healthcare. In 2018, there could be a greater interest from the Chinese companies in the Korean M&amp;A market, which could help to accelerate some of the M&amp;A activities of the companies listed below. In 2017, many Chinese companies avoided acquiring Korean companies due to the political pressure from the Chinese government arising from the THAAD conflict

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Equity Bottom-Up

When we first wrote about CJ Logistics (aka <a href="https://www.smartkarma.com/entities/11557" target="_blank" data-smartkarma-citation="entities:11557:1">CJ Korea Express Corp (000120 KS)</a>) here at Smartkarma last June (see <a href="https://www.smartkarma.com/insights/why-cj-logistics-won-t-likely-reach-annual-eps-of-6-400-won-any-time-soon" target="_blank" data-smartkarma-citation="insights:11385">Why CJ Logistics Won’t Likely Reach Annual EPS of 6,400+ Won Any Time Soon</a>), we urged investors to avoid the shares, stating that consensus EPS expectations for 2018 and 2019 were far too high, and that near-term earnings could disappoint, as well. In our view, those unrealistically high 2018-19 earnings forecasts were built on an expectation that several recent overseas acquisitions…

When we first wrote about CJ Logistics (aka CJ Korea Express Corp (000120 KS)) here at Smartkarma last June (see Why CJ Logistics Won’t Likely Reach Annual EPS of 6,400+ Won Any Time Soon), we urged investors to avoid the shares, stating that consensus EPS expectations for 2018 and 2019 were far too high, and that near-term earnings could disappoint, as well. In our view, those unrealistically high 2018-19 earnings forecasts were built on an expectation that several recent overseas acquisitions…

CJ Logistics: Still No Signs of Hoped-For Synergies from Acquisitions, Retaining Negative View

Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

LR Research

In Today's Issue<table class="table table-striped"><tbody>
<tr>
<td>Area</td>
<td>Item</td>
</tr>
<tr>
<td>Economic/Commodities</td>
<td>
REMITTANCES TO INDIA ARE DOWN
BRAZIL SOYBEAN EXPORTS ARE UP
PRECIOUS METALS PRICES FLIRT WITH SUPPORT _ COULD BREAKDOWN
PEMEX MAKES SIZEABLE OIL DISCOVERY
</td>
</tr>
<tr>
<td>Policy Led</td>
<td>
SAUDI PURGE
CHINA'S PARIS OUTPERFORMANCE
PBoC LOOKING AT ITS OWN DIGITAL CURRENCY
VENEZUELA SEEKS EXTERNAL DEBT RESTRUCTURING
CHINA'S MAINLAND LAW ON THE NATIONAL ANTHEM TO APPLY TO HK AND MACAU
</td>
</tr>
<tr>
<td>Management Specific</td>
<td>
AMAZON INTO HEALTH INSURANCE IN EUROPE?
CJ CHEILJIDANG SELLING CJ HEALTH?
HDFC STANDARD…
</td>
</tr>
</tbody></table>

In Today's Issue

Area
Item


Economic/Commodities

REMITTANCES TO INDIA ARE DOWN
BRAZIL SOYBEAN EXPORTS ARE UP
PRECIOUS METALS PRICES FLIRT WITH SUPPORT _ COULD BREAKDOWN
PEMEX MAKES SIZEABLE OIL DISCOVERY



Policy Led

SAUDI PURGE
CHINA'S PARIS OUTPERFORMANCE
PBoC LOOKING AT ITS OWN DIGITAL CURRENCY
VENEZUELA SEEKS EXTERNAL DEBT RESTRUCTURING
CHINA'S MAINLAND LAW ON THE NATIONAL ANTHEM TO APPLY TO HK AND MACAU



Management Specific

AMAZON INTO HEALTH INSURANCE IN EUROPE?
CJ CHEILJIDANG SELLING CJ HEALTH?
HDFC STANDARD…




Event-Driven

On November 3rd (during the market open), it was reported in numerous Korean media outlets that the CJ Group plans to sell CJ Healthcare and that CJ Cheiljedang has hired Morgan Stanley for this M&amp;A mandate, which is expected to be more than 1 trillion won. Shares of <a href="https://www.smartkarma.com/entities/1970" target="_blank" data-smartkarma-citation="entities:1970:1">CJ Cheiljedang Corp (097950 KS)</a>, which currently owns a 100% stake in CJ Healthcare, were up 4.8% on November 3rd. However, after the market close on November 3rd, CJ Cheiljedang announced that it has yet to make an official…

On November 3rd (during the market open), it was reported in numerous Korean media outlets that the CJ Group plans to sell CJ Healthcare and that CJ Cheiljedang has hired Morgan Stanley for this M&amp;A mandate, which is expected to be more than 1 trillion won. Shares of CJ Cheiljedang Corp (097950 KS), which currently owns a 100% stake in CJ Healthcare, were up 4.8% on November 3rd. However, after the market close on November 3rd, CJ Cheiljedang announced that it has yet to make an official…

Korea M&A Spotlight: CJ Group Plans to Sell CJ Healthcare - Is This On or Off?

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Quantamental Investing to beat Benchmarks

A. Stotz Investment Research

We pick stocks. We construct portfolios. All our effort is focused on how to better pick stocks and construct portfolios. We serve fund management companies, family offices, and high net worth individuals.

<ul><li>Cheap on a gross profit basis, low price-to-sales, and strong long-term sales growth relative to its sector </li><li>CJCJ continues global expansion through acquisition of Sementes Selecta SA, a Brazilian manufacturer of soy protein concentrate worth US$143m; CJCJ plans to lift its production capacity up by 50% </li><li>In-house production of home meal replacement (HMR) products is expected to rise to 70%, bringing higher margins. HMR revenue was up almost 200% YoY in 2Q17 </li><li>Attractive at 17CE* 6.3% ROE/PB relative to Asian sector at 4.3% </li><li>Risks: Increase in shipping taxes, tighter regulations on biochemicals</li></ul>

Cheap on a gross profit basis, low price-to-sales, and strong long-term sales growth relative to its sector CJCJ continues global expansion through acquisition of Sementes Selecta SA, a Brazilian manufacturer of soy protein concentrate worth US$143m; CJCJ plans to lift its production capacity up by 50% In-house production of home meal replacement (HMR) products is expected to rise to 70%, bringing higher margins. HMR revenue was up almost 200% YoY in 2Q17 Attractive at 17CE* 6.3% ROE/PB relative to Asian sector at 4.3% Risks: Increase in shipping taxes, tighter regulations on biochemicals

CJCJ (097950 KS): Earning High Margins Serving Food in the Home

South Korea

CJ CheilJedang Corp. manufactures processed food products.  The Company's products include refined sugar, monosodium glutamate (MSG), condiment, wheat powder, flour, cooking oil, processed meats, and animal feed.  CJ CheilJedang also manufactures pharmaceutical and household products.

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CJ Cheiljedang (097950 KS)

2018 Korea M&A Preview: What's For Sale?

We highlight 25 Korean companies that are seeking to find new owners through M&A in 2018. Key sectors of M&A in Korea in 2018...

Douglas Kim

CJ Logistics: Still No Signs of Hoped-For Synergies from Acquisitions, Retaining Negative View

When we first wrote about CJ Logistics (aka CJ Korea Express Corp (000120 KS)) here at Smartkarma last June (see Why CJ Logistics Won’t Likely...

Daniel Hellberg

21 Things Worth Knowing (#8)

In Today's Issue1. Saudi Crown Prince kick starts an anti-corruption drive in a bid to cement his power. So far 11 princes, 4 ministers and a...

Mark Artherton

Korea M&A Spotlight: CJ Group Plans to Sell CJ Healthcare - Is This On or Off?

On November 3rd (during the market open), it was reported in numerous Korean media outlets that the CJ Group plans to sell CJ Healthcare and that...

Douglas Kim

CJCJ (097950 KS): Earning High Margins Serving Food in the Home

Cheap on a gross profit basis, low price-to-sales, and strong long-termsales growth relative to its sector CJCJ continues global expansion through...

A. Stotz Investment Research

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