Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

On 26 November, <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a> officially announced the formation of another Holdco (tentatively named 'LG NewCo') and the split of 4 companies (out of 13 affiliates) from LG Corp including <a href="https://www.smartkarma.com/entities/lg-international-corp" target="_blank" data-smartkarma-citation="entities:3281:1" rel="noopener">LG International (001120 KS)</a>, <a href="https://www.smartkarma.com/entities/lg-hausys-ltd" target="_blank" data-smartkarma-citation="entities:11613:1" rel="noopener">LG Hausys Ltd (108670 KS)</a>, <a href="https://www.smartkarma.com/entities/silicon-works-co-ltd" target="_blank" data-smartkarma-citation="entities:20670:1" rel="noopener">Silicon Works (108320 KS)</a>, and LG MMA. In addition, Pantos will become an affiliate of LG International. The LG NewCo will be operated separately from LG Corp and the former company will have its own separate BOD and senior professional managers who will oversee the company. The new BOD will be headed up by Koo Bon Joon, the uncle of the current LG Chairman Koo Kwang Mo. Overall, we believe this creation of the LG NewCo will have a positive impact on <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a>. However, the overall impact is likely to be much bigger for LG NewCo than LG Corp. Therefore, once the two stocks start to trade again on May 27th, 2021, there is a good chance that LG NewCo stock price rises higher than LG Corp.In this insight, we have also provided an updated SoTP valuation of LG Corp and a SoTP valuation of LG NewCo.

On 26 November, LG Corp (003550 KS) officially announced the formation of another Holdco (tentatively named 'LG NewCo') and the split of 4 companies (out of 13 affiliates) from LG Corp including LG International (001120 KS), LG Hausys Ltd (108670 KS), Silicon Works (108320 KS), and LG MMA. In addition, Pantos will become an affiliate of LG International. The LG NewCo will be operated separately from LG Corp and the former company will have its own separate BOD and senior professional managers who will oversee the company. The new BOD will be headed up by Koo Bon Joon, the uncle of the current LG Chairman Koo Kwang Mo. Overall, we believe this creation of the LG NewCo will have a positive impact on LG Corp (003550 KS). However, the overall impact is likely to be much bigger for LG NewCo than LG Corp. Therefore, once the two stocks start to trade again on May 27th, 2021, there is a good chance that LG NewCo stock price rises higher than LG Corp.In this insight, we have also provided an updated SoTP valuation of LG Corp and a SoTP valuation of LG NewCo.

LG Group Announces the Formation of LG NewCo & Split of 4 Companies from LG Corp

Equity Bottom-Up

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In this insight, we provide an updated SoTP valuation analysis on <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a>. We have a positive view of this stock. Our base case valuation analysis suggests an implied price of 120,787 won per share, representing a 60% upside from current levels.
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In addition to its deep discount versus its NAV, there are also 4 key catalysts for the company which are as follows:
<ul>
<li>Potential for higher dividends</li>
<li>IPO of LG Energy Solutions</li>
<li>
Split of LG International and LG Hausys from the LG Group 
</li>
<li> Time to Close to the Gaps With Major Affiliates </li>
</ul>


In this insight, we provide an updated SoTP valuation analysis on LG Corp (003550 KS). We have a positive view of this stock. Our base case valuation analysis suggests an implied price of 120,787 won per share, representing a 60% upside from current levels.

In addition to its deep discount versus its NAV, there are also 4 key catalysts for the company which are as follows:

Potential for higher dividends
IPO of LG Energy Solutions

Split of LG International and LG Hausys from the LG Group 

 Time to Close to the Gaps With Major Affiliates 


It was announced this morning that <a href="https://www.smartkarma.com/entities/lg-international-corp" target="_blank" data-smartkarma-citation="entities:3281:1" rel="noopener">LG International (001120 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-hausys-ltd" target="_blank" data-smartkarma-citation="entities:11613:1" rel="noopener">LG Hausys Ltd (108670 KS)</a> will split from the LG Group. Following this announcement, LG International and LG Hausys shares are up 2.9% and 5.4%, respectively. Koo Bon-Joon, the second eldest member of the Koo brother of the LG Group, is leading this split. Koo Bon-Joon has a 7.7% stake in LG Corp (003550 KS), which is currently worth 992 billion won. Both LG International and LG Hausys' share price are rising because many investors believe that once they are split from the LG Group, they believe that the new owner Koo Bon-Joon could revitalize these companies and that this M&amp;A event is a key signal that Koo Bon-Joon is trying to complete this deal when these two companies are highly undervalued.

It was announced this morning that LG International (001120 KS) and LG Hausys Ltd (108670 KS) will split from the LG Group. Following this announcement, LG International and LG Hausys shares are up 2.9% and 5.4%, respectively. Koo Bon-Joon, the second eldest member of the Koo brother of the LG Group, is leading this split. Koo Bon-Joon has a 7.7% stake in LG Corp (003550 KS), which is currently worth 992 billion won. Both LG International and LG Hausys' share price are rising because many investors believe that once they are split from the LG Group, they believe that the new owner Koo Bon-Joon could revitalize these companies and that this M&amp;A event is a key signal that Koo Bon-Joon is trying to complete this deal when these two companies are highly undervalued. 

LG International & LG Hausys To Split from the LG Group

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

This is hardly a surprise. Immediately after LG Chem (LGC) acquired Dongbu Farm Hannong early this year, LG Chem unveiled its plan to acquire additional companies (particularly biopharmaceutical companies). Even when LG Chem’s management appointed Kim Yong-hwan (Korea’s top expert for agricultural industry) as the CEO of Farm Hannong in June, LG Chem again emphasized that it would seek for additional biopharmaceutical and agricultural companies that could merge with LG Chem.Since last year, LG…

This is hardly a surprise. Immediately after LG Chem (LGC) acquired Dongbu Farm Hannong early this year, LG Chem unveiled its plan to acquire additional companies (particularly biopharmaceutical companies). Even when LG Chem’s management appointed Kim Yong-hwan (Korea’s top expert for agricultural industry) as the CEO of Farm Hannong in June, LG Chem again emphasized that it would seek for additional biopharmaceutical and agricultural companies that could merge with LG Chem.Since last year, LG…

Key Points of LG Chem & LG Life Sciences Merger

South Korea

LX Hausys, Ltd. manufactures various building materials such as wallcoverings, windows, floor coverings, and acrylic solid surfaces. The Company also produces finishing materials like high-gloss sheets used in home appliances and injection -molded parts & interior coverstocks for auto industry. LX Hausys markets its products worldwide.

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LX Hausys Ltd (108670 KS)

LG Group Announces the Formation of LG NewCo & Split of 4 Companies from LG Corp

LG Group announced the creation of the LG NewCo, which we believe will have a positive impact on LG Corp. However, the overall positive impact is...

Douglas Kim

LG Corp: Deep Value + 4 Key Catalysts

In this insight, we provide 4 key catalysts of LG Corp as well as an updated SoTP valuation analysis on the company. Our base case value suggests a...

Douglas Kim

LG International & LG Hausys To Split from the LG Group

It was announced this morning that LG International and LG Hausys Ltd will split from the LG Group. Koo Bon-Joon, the second eldest member of the...

Douglas Kim

Key Points of LG Chem & LG Life Sciences Merger

This is hardly a surprise. Immediately after LG Chem (LGC) acquired Dongbu Farm Hannong early this year, LG Chem unveiled its plan to acquire...

Sanghyun Park

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