Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 25 years of experience in analyzing hundreds of companies, especially in Asia. Deep expertise in the following sectors:
- Technology (E-commerce, SaaS, Internet)
- Consumer 
- Special Situations/Deep Value Plays
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Does LG Group Hold Leverage over Apple and Not the Other Way Around?

LG Electronics: Impact of Restructuring the Solar Panel Business

A Pair Trade Between LG Corp & LG Electronics

LG Electronics' New JV (LG Magna E-Powertrain): A Strategy to Become a Supplier to Apple's EVs?

LG Corp: Updated SoTP Valuation Analysis & Timing of Key Upcoming Catalyst Events

Transfer of Rechargeable Batteries Modules & Packs Business from LG Electronics to LG Chem?

Event-Driven

<p>Shares of <a href="https://www.smartkarma.com/entities/lg-electronics-inc" target="_blank" data-smartkarma-citation="entities:8814:1" rel="noopener">LG Electronics (066570 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-corp" target="_blank" data-smartkarma-citation="entities:6653:1" rel="noopener">LG Corp (003550 KS)</a> increased by 12.8% and 5.3% respectively today. The CEO of LG Elctronics Kwon Bong-Seok announced today that the company is open to all possibilities regarding the MC (mobile communications) business unit which has been a consistently generated big losses for the company in the past decade.</p><p>Basically, although the CEO Kwon has not directly mentioned that the company will sell the MC business unit, he provided indirect clues that the company is now very serious about selling the the money losing MC business unit to boost the overall value of the company. Despite the MC unit coming out with some innovative products, this business unit had 23 consecutive quarters of losses until the end of last year. </p><div class="content-highlight"><p><strong>Our base case assumes that if the MC business unit is discontinued, the additional value accretion to LG Electronics would be 7.8 trillion won (dividing the annual operating loss of 777 billion won by the 10% perpetuity discount rate). This 7.8 trillion won in value would be 28% of LG Electronics' current market cap of 27.4 trillion won. </strong></p></div>

Shares of LG Electronics (066570 KS) and LG Corp (003550 KS) increased by 12.8% and 5.3% respectively today. The CEO of LG Elctronics Kwon Bong-Seok announced today that the company is open to all possibilities regarding the MC (mobile communications) business unit which has been a consistently generated big losses for the company in the past decade.Basically, although the CEO Kwon has not directly mentioned that the company will sell the MC business unit, he provided indirect clues that the company is now very serious about selling the the money losing MC business unit to boost the overall value of the company. Despite the MC unit coming out with some innovative products, this business unit had 23 consecutive quarters of losses until the end of last year. Our base case assumes that if the MC business unit is discontinued, the additional value accretion to LG Electronics would be 7.8 trillion won (dividing the annual operating loss of 777 billion won by the 10% perpetuity discount rate). This 7.8 trillion won in value would be 28% of LG Electronics' current market cap of 27.4 trillion won. 

Will LG Electronics Finally Sell or Discontinue the MC Business & Fix Its Achilles Heel?