Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 30 years of experience in the Korean/Asian equity research. Major sectors coverage include the following:
- Technology 
- Consumer 
- Special Situations/Deep Value Plays
- Tender Offers/M&As
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

A Pair Trade Between CJ Cheiljedang and CJ Logistics

Lotte Logistics Pre-IPO - Sluggish Revenues, High Dependence on Group Affiliates

Douglas Research Advisory

Equity Capital Markets

Lotte Global Logistics / Equity Capital Markets

<ul>
<li>Our base case valuation of Lotte Global Logistics is implied market cap of 560 billion won, which represents target price of 13,454 won per share. </li>
<li>We have a negative view of this IPO as our target price does not provide a meaningful upside to the IPO price range. </li>
<li>Four major factors we are negative on this IPO include lack of sales growth, excessive competition (Coupang and CJ Logistics), mystery of put option clause, and highly geared balance sheet.</li>
</ul>


Our base case valuation of Lotte Global Logistics is implied market cap of 560 billion won, which represents target price of 13,454 won per share. 
We have a negative view of this IPO as our target price does not provide a meaningful upside to the IPO price range. 
Four major factors we are negative on this IPO include lack of sales growth, excessive competition (Coupang and CJ Logistics), mystery of put option clause, and highly geared balance sheet.


Lotte Global Logistics IPO Valuation Analysis