DOCSLIB.ORG

Lotte Confectionery (004990)

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Lotte Confectionery (004990) Company Brief March 9, 2017 Lotte Confectionery (004990) 12M rating BUY (Maintain) THADD impact on shares 12M TP W250,000 from W250,000 Up/downside +29% Chocolate factory jointly owned with Hershey to halt production - Output at Lotte Shanghai Foods, a chocolate-making joint venture between Lotte Stock Data Confectionary and Hershey, will be suspended one month from July due to fire KOSPI (Mar 8, pt) 2,095 safety violations. Stock price (Mar 8, KRW) 194,000 - Lotte Shanghai Foods was established in 2007 as a joint venture with Hershey. Market cap (USD mn) 2,407 And, LH Foods (50-owned by Lotte Confectionary) and Lotte (China) Investment Shares outstanding (mn) 14 (wholly-owned by Lotte Confectionary) hold a 50% stake in Lotte Shanghai 52-Week high/low (KRW) 280,600/162,000 6M avg. daily turnover (USD mn) 5.1 Foods. Free float / Foreign ownership (%) 37.3/34.3 - Lotte Shanghai Foods contributes to earnings at Lotte Confectionary on an Major shareholders (%) equity-method basis with 2016 net sales estimated at W120bn (W121bn in 2015) Lotte Aluminum Co.,Ltd and 11 62.7 others and NP at W5.7bn (W5.6bn). First Eagle Investment Management, 7.5 LLC Capital in China businesses already down sharply Performance - Book value of the eight China subsidiaries, including Lotte Shanghai Foods, is 1M 6M 12M estimated at W30bn as of end-2016. Absolute (%) (9.6) 14.1 (24.4) - Lotte Shanghai Foods is the largest company in terms of net assets, followed by Relative to KOSPI (%p) (11.0) 12.6 (32.0) Lotte China Foods. 12MF PE trend - If these types of retaliatory measures persist over the long term, additional losses (X) 12MF PER (LHS) (W' 000) 400 may be incurred by Lotte Confectionary’s China operations. 40 price (RHS) 350 - But due to sluggish earnings, capital at China subsidiary has already eroded to 35 300 only about 20% of consolidated OP and the fixed cost burden has eased on 30 250 25 sustained restructuring. 200 20 - We estimate 2016 operating results at the China subsidiaries will be in line YoY 150 15 (W78bn in 2015) while operating losses should narrow more than W10bn to 100 10 W12.1bn. 5 50 0 0 Apr-14 Apr-15 Apr-16 THADD issue unfavorable for shares, but adopt reasonable approach Source: WISEfn consensus - Lotte Confectionary should be indirectly impacted due to the unfavorable effects on affiliate stakes, including Lotte Shopping (7.9% stake), which has significant exposure to China. 2014A 2015A 2016F 2017F 2018F Sales (W bn) 2,225 2,258 2,248 2,355 2,457 chg. (% YoY) 12.6 1.5 (0.4) 4.8 4.3 Operating profit (W bn) 115 144 128 155 174 Net profit (W bn) 2 79 84 124 144 EPS (KRW) (203) 5,345 5,510 8,173 9,463 chg. (% YoY) NM NM 3.1 48.3 15.8 Kyoung Ju Lee EBITDA (W bn) 206 240 228 256 276 822-3276-6269 PE (x) NM 42.6 32.4 23.7 20.5 [email protected] EV/EBITDA (x) 15.0 15.4 13.6 12.9 11.9 Youjin Jung PB (x) 1.0 1.3 1.0 1.2 1.2 822-3276-6228 ROE (%) -0.1 3.0 3.1 4.8 5.7 [email protected] Dividend yield (%) 0.3 0.5 0.6 0.8 1.0 Note: Net profit and EPS are based on figures attributed to controlling interest Analysts who prepared this report are registered as research analysts in Korea but not in any other jurisdiction, including the U.S. PLEASE SEE ANALYST CERTIFICATIONS AND IMPORTANT DISCLOSURES & DISCLAIMERS AT THE END OF THIS REPORT. Lotte Confectionery (004990) - Going forward, we believe shares will be catalyzed by the sustained high growth in Kazakhstan and Pakistan, the adoption of a holding company structure and the IPO of unlisted subsidiaries, in addition to the geopolitical tensions between Korea and China. Figure 1. Lotte Confectionery’s China stake breakdown Note: Stake and net assets as of 3Q16 Source: Company data, Korea Investment & Securities 2 Lotte Confectionery (004990) Changes to recommendation and price target Company (Code) Date Recommendation Price target Lotte Confectionery (004990) 03-11-15 BUY W250,000 03-08-16 BUY W290,000 10-24-16 BUY W250,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 Mar-15 Jul-15 Nov-15 Mar-16 Jul-16 Nov-16 Mar-17 3 Lotte Confectionery (004990) ■ Guide to Korea Investment & Securities Co., Ltd. stock ratings based on 12-month forward share price performance relative to the market index BUY: Expected to outperform the market index by 15%p or more Hold: Expected to underperform or outperform the market index by less than 15%p Underweight: Expected to underperform the market index by 15%p or more Korea Investment & Securities does not offer target prices for stocks with Hold or Underweight ratings. ■ Guide to Korea Investment & Securities Co., Ltd. stock rating allocation (as of Dec 31, 2016) BUY Hold Underweight (Sell) 77.6% 21.1% 1.3% Note: % of companies under coverage with this rating ■ Guide to Korea Investment & Securities Co., Ltd. sector ratings for the next 12 months Overweight: Recommend increasing the sector’s weighting in the portfolio compared to its respective weighting in the Kospi (Kosdaq) based on market capitalization. Neutral: Recommend maintaining the sector’s weighting in the portfolio in line with its respective weighting in the Kospi (Kosdaq) based on market capitalization. Underweight: Recommend reducing the sector’s weighting in the portfolio compared to its respective weighting in the Kospi (Kosdaq) based on market capitalization. ■ Analyst Certification I/We, as the research analyst/analysts who prepared this report, do hereby certify that the views expressed in this research report accurately reflect my/our personal views about the subject securities and issuers discussed in this report. I/We do hereby also certify that no part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. ■ Important compliance notice As of the end of the month immediately preceding the date of publication of the research report or the public appearance (or the end of the second most recent month if the publication date is less than 10 calendar days after the end of the most recent month), Korea Investment & Securities Co., Ltd., or its affiliates does not own 1% or more of any class of common equity securities of Lotte Confectionery. There is no actual, material conflict of interest of the research analyst or Korea Investment & Securities Co., Ltd., or its affiliates known at the time of publication of the research report or at the time of the public appearance. Korea Investment & Securities Co., Ltd., or its affiliates has not managed or co-managed a public offering of securities for Lotte Confectionery in the past 12 months; Korea Investment & Securities Co., Ltd., or its affiliates has not received compensation for investment banking services from Lotte Confectionery in the past 12 months; Korea Investment & Securities Co., Ltd., or its affiliates does not expect to receive or intend to seek compensation for investment banking services from Lotte Confectionery in the next 3 months. Korea Investment & Securities Co., Ltd., or its affiliates was not making a market in Lotte Confectionery’s securities at the time that the research report was published. Korea Investment & Securities Co., Ltd. does not own over 1% of shares of the companies mentioned in this report as of March 9, 2017. Korea Investment & Securities Co., Ltd. has not provided this report to various third parties. Neither the analyst/analysts who prepared this report nor their associates own any shares of the company/companies mentioned in this report as of March 9, 2017. Prepared by: Kyoung Ju Lee 4 Lotte Confectionery (004990) Global Disclaimer ■ General This research report and marketing materials for Korean securities are originally prepared and issued by the Research Center of Korea Investment & Securities Co., Ltd., an organization licensed with the Financial Supervisory Service of South Korea. The analyst(s) who participated in preparing and issuing this research report and marketing materials is/are licensed and regulated by the Korea Financial Investment Association in Korea only. This report and marketing materials are copyrighted and may not be copied, redistributed, forwarded or altered in any way without the consent of Korea Investment & Securities Co., Ltd. This research report and marketing materials are for information purposes only. They are not and should not be construed as an offer or solicitation of an offer to purchase or sell any securities or other financial instruments or to participate in any trading strategy. This research report and marketing materials do not provide individually tailored investment advice. This research report and marketing materials do not take into account individual investor circumstances, objectives or needs, and are not intended as recommendations of particular securities, financial instruments or strategies to any particular investor. The securities and other financial instruments discussed in this research report and marketing materials may not be suitable for all investors. The recipient of this research report and marketing materials must make their own independent decisions regarding any securities or financial instruments mentioned herein and investors should seek the advice of a financial adviser. Korea Investment & Securities Co., Ltd. does not undertake that investors will obtain any profits, nor will it share with investors any investment profits. Korea Investment & Securities Co., Ltd., its affiliates, or their affiliates and directors, officers, employees or agents of each of them disclaim any and all responsibility or liability whatsoever for any loss (director consequential) or damage arising out of the use of all or any part of this report or its contents or otherwise arising in connection therewith.
Load more

Recommended publications
  • Lotte Annual Report 2019-20
    CONTENTS PAGE NO. CORPORATION INFORMATION 1 TEN YEARS AT A GLANCE 2 NOTICE TO SHAREHOLDERS 3 DIRECTORS’ REPORT & MANAGEMENT DISCUSSION AND ANALYSIS 15 ANNEXURES TO DIRECTORS’ REPORT 21 REPORT ON CORPORATE GOVERNANCE 30 GENERAL SHAREHOLDER INFORMATION 35 REPORT OF THE INDEPENDENT AUDITORS 36 BALANCE SHEET 44 STATEMENT OF PROFIT AND LOSS 46 CASH FLOW 48 NOTES TO FINANCIALS 50 CORPORATE INFORMATION Board of Directors YUN KANG JUNG Chairman cum WTD MILAN WAHI Managing Director KYUNGHUN KIM Whole Time Director & CFO (till 29.06.2020) IN CHUL YEO Whole Time Director & CFO (from 10.02.2020) MANG KO NOH Director (till 7.08.2020) MYEONGRIM CHOI Director (from 07.08.2020) D.G.RAJAN Independent Director HYE LIM JEON Independent Director Company Secretary T.G.KARTHIKEYAN Registered office No.4/111, Mount Poonamallee Road Manapakkam, Chennai – 600 089. Head office No.4/169, Rajiv Gandhi Salai (OMR) Kandanchavadi, Chennai – 600 096. Factories Nellikuppam (Cuddalore Dist), Tamil Nadu Nemam, Chennai, Tamil Nadu Rohtak, Haryana Auditors Price Waterhouse Chartered Accountants LLP Chennai Bankers HDFC Bank Ltd 1 TEN YEARS AT A GLANCE 2016 (15 months 2011 2012 2013 2014 2016-17 2017-18 2017-18* 2018-19* 2019-20* Jan 2015- March 2016) OPERATING RESULTS: GROSS INCOME 28,874 31,932 35,866 37,448 48,132 40,245 42,576 42,621 45,490 44,070 PROFIT/(LOSS) BEF DEPN.,INTEREST & TAX 2,337 2,389 2,419 2,061 2,815 3,395 4,087 4,029 5,814 3,316 PROFIT/(LOSS) BEF INTEREST & TAX 623 842 661 319 (919) (845) (7) (65) 1,779 (915) PROFIT/(LOSS) BEFORE TAX (PBT) 615 837 649 272
    [Show full text]
  • Holding Companies Lotte Group : Changes Expected Following Holding Company Conversion
    Holding Companies Lotte Group : Changes expected following holding company conversion Spin-off/merger resolutions likely to pass, assuming 60-70% attendance To establish a holding company, four key Lotte Group affiliates—Lotte Overweight (Maintain) Confectionery, Lotte Shopping, Lotte Chilsung, and Lotte Foods—are planning spin-offs and a merger , subject to approval of special resolutions at shareholders’ meetings (requiring the affirmative vote of two-thirds of the shareholders present Industry Report in person or by proxy, comprising at least one-third of total issued shares). August 29, 2017 Assuming a meeting attendance rate of 60-70% (based on historical examples), we believe all four Lotte affiliates will pass the resolutions (considering the stakes held by the largest shareholders and related parties). Mirae Asset Daewoo Co., Ltd. Holding company valued at between W4.1tr and W4.8tr We estimate the fair value of the new holding company between W4.1tr and W4.8tr. [Holding companies/IT services ] We present two sets of valuations, one that does not reflect brand royalties and one that does (based on a 20bp royalty rate, same as LG Corp.’s and SK Holdings’), as Dae -ro Jeong details regarding royalty rates or the timing of collection have not been released. +822 -3774 -1634 [email protected] Combined value of the four affiliates to increase slightly post-spinoff In assessing the fair values of the new holding company and the operating units of the four affiliates, we examined potential changes in each entity’s market capitalization before and after the spin-offs. Our analysis suggests that the combined market capitalization of the four affiliates will increase slightly after the spin-offs, by between 0.4% and 5.6%.
    [Show full text]
  • Lotte Shopping Co., Ltd. Separate Financial Statements December 31, 2017 Lotte Shopping Co., Ltd
    Lotte Shopping Co., Ltd. Separate Financial Statements December 31, 2017 Lotte Shopping Co., Ltd. Index December 31, 2017 and 2016 Page(s) Independent Auditor’s Report ....................................................................................................... 1 - 2 Separate Financial Statements Separate Statements of Financial Position ............................................................................................. 3 Separate Statements of Comprehensive Income ................................................................................... 4 Separate Statements of Changes in Equity ............................................................................................ 5 Separate Statements of Cash Flows ...................................................................................................... 6 Notes to the Separate Financial Statements ................................................................................. 7 - 110 Independent Auditor’s Report (English Translation of a Report Originally Issued in Korean) To the Board of Directors and Shareholders of Lotte Shopping Co., Ltd. We have audited the accompanying separate financial statements of Lotte Shopping (the Company) which comprise the separate statement of financial position as at December 31, 2017, and the separate statement of comprehensive income, separate statement of changes in equity and separate statement of cash flows for the year then ended, and notes to the separate financial statements, including a summary of significant
    [Show full text]
  • Business Proposal (Dehumidifier) Lotte Engineering & Machinery MFG / Overseas Business Team
    Business Proposal (Dehumidifier) Lotte Engineering & Machinery MFG / Overseas Business Team © Copyright 2011 LOTTE Engineering & Machinery MFG.Co., Ltd / Oversea sales & Marketing LOTTE Group Profile | Introduction Founded in 1948 , Japan / 1967, Korea Global conglomerate 5’th largest company in Korea Turnover USD 83Bilion in 2014 Number of Employees 60,000 Employees Core Business Retail, Manufacture, Leisure and Tourism #1 in Market Share Department store, Supermarket, Online shopping Mall, Home appliance Store Chemicals (Ethylene, Pet, Meg), Tourism (Hotel, Duty Free Shop, Theme Park) Stores 14,000 Stores in Korea and Overseas Ranking LOTTE is ranked 5’th among Korean Business Group Rank (Asset) 1990 2000 2010 Revenue CAGR (’01~’09)2 1 Hyundai Hyundai Samsung 6.8% 2 Daewoo¹ Samsung Hyundai Motor 12.7% 3 LG LG SK 9.0% 4 Samsung SK LG 10.7% 5 Hanjin Hanjin LOTTE 16.9% 6 SK LOTTE POSCO 12.7% 7 Ssang Yong1 Daewoo GS 17.5% 8 LOTTE Kumho Hyundai Heavy Ind. 21.2% 9 Kia Hanwha Hanjin -2.3% 10 Hanwha Ssang Yong KT 1.1% [ Source: Fair Trade Commission ] © Copyright Oversea Biz Team / LOTTE E&M 2015 © Copyright 2011 LOTTE Engineering & Machinery MFG.Co., Ltd / Oversea sales & Marketing LOTTE Group Profile | Introduction Business Structure Food & Beverage Retail Tourism / Service LOTTE Hotel LOTTE Shopping LOTTE Duty Free LOTTE Department store LOTTE World LOTTE Mart LOTTE JTB LOTTE Confectionery LOTTE Super LOTTE Asset Development LOTTE Chilsung Bev LOTTE Cinema LOTTE Corporation LOTTE Foods LOHB’s (H&B Division) LOTTE International LOTTE ria LOTTE
    [Show full text]
  • We Enrich People's Lives by Providing Superior Products and Services That
    LOTTE PROFILE 2015 PREPARED WAY LOTTE PROFILE 2014 LOTTE 2014 PROFILE Japanese We enrich people's WAYlives by providing superior products and services that our customers love and trust LOTTE PROFILE 2015 PREPARED WAY contents PREPARED WAY LOTTE 3 Global Strategy 4 Message from the Chairman 6 Global Passion 10 Social Responsibility 18 Financial Information 21 PREPARED WORLD Business Structure 33 Business Overview 34 Brand & Satisfaction 45 PREPARED WAY LOTTE is moving toward a better tomorrow. By taking on the challenge of ceaseless innovation, The company name ‘LOTTE’ originates from the name Charlotte in The Sorrows of Young Werther, by Goethe. Like the heroine Charlotte, who was beloved by all, LOTTE seeks to earn the goodwill of customers around the world. LOTTE is poised to become one of Asia’s leading conglomerates. PREPARED WAY LOTTE 3 LOTTE contributes to enriching life by providing products and services that are loved and trusted. Since LOTTE officially entered the food industry by founding LOTTE Confectionery in 1967, it has become a leader in the Korean tourism and retail industries by establishing some of Korea’s top hotels and department stores. LOTTE has since extended its reach into such key industries as petrochemicals and construction. LOTTE is positioning itself as one of Korea’s key conglomerates based on a wealth of diverse experiences and know-how. Furthermore, it strives to grow as a global conglomerate trusted by customers all over the world through continued efforts. LOTTE will continue to make customers’ lives richer with its strict quality control and differentiated services. MISSION We enrich people’s lives by providing superior products and services that our customers love and trust PREPARED WAY GLOBAL STRATEGY 5 A brand that provides happiness to customers all over the world and builds trust with excellent food & beverage With enhanced sales organizations and marketing strategies in China, Japan, products and services – this is what LOTTE aims to be.
    [Show full text]
  • The Recipe for F&B
    Analyst 한국희 Analyst 손예희 3774-1474 3774-1681 [email protected] [email protected] Weekly Update The Recipe for F&B: valuation Global / Food, Beverage and Tobacco Aug 28 2007 Vol. 1 한국 F&B 섹터의 밸류에이션 부담 완화 중 F&B Sector Performance <World> (%) 1W 1M 6M ■ 방어적 흐름 지속된 가운데 AP 개별 종목 상승률 돋보임 MSCI AC world 3.7 (4.3) (0.2) MSCI AC world F&B 2.4 (1.2) 1.6 지난 1주간 글로벌 F&B 섹터는 전반적으로 벤치마크 대비 언더퍼폼하였는데, 지난 6개 Relative Performance (1.4) 3.1 1.8 월간의 이른바 ‘defensive’한 주가 트랜드가 지속된 것으로 풀이됨. 즉 bear market에 서의 섹터 퍼포먼스는 상대적으로 양호하나, bull market에서의 주가 상승 탄력은 벤치 <AP ex. Japan> (%) 1W 1M 6M 마크 지수 대비 열등한, 전형적인 흐름을 보이고 있음. 지난 1주간 MSCI AC world, MSCI AP ex. Japan 9.1 (6.9) 8.5 MSCI AP ex. Japan, MSCI Korea 각각의 상대 퍼포먼스는 -1.4%, -2.5%, -1.4% 수 MSCI AC ex. Japan F&B 6.7 (4.6) 4.5 준에 그쳤음. 다만 유럽 및 미국 지역에 비해 아시아퍼시픽 지역의 지수 상승률이 높게 Relative Performance (2.5) 2.3 (4.0) 나타남에 따라, 음식료 섹터에서도 일본을 비롯한 아시아 지역의 개별 종목 수익률이 돋 보였음. Tingyi Holdings의 주간 상승률이 18.0%로 가장 높았고, 롯데칠성, 하이트, CJ <Korea> (%) 1W 1M 6M 등의 한국 음식료 종목들이 그 뒤를 이었음. 이에 비해 Pepsi, Coca-Cola를 비롯한 미 MSCI Korea 9.2 (9.7) 17.2 국 지역 beverage sector 및 Kellogg, Hershey 등의 food sector의 주가는 부진하였음.
    [Show full text]
  • FTSE Developed Asia Pacific All Cap
    FTSE PUBLICATIONS 19 November 2016 FTSE Developed Asia Pacific All Cap Indicative Index Weight Data as at Closing on 30 September 2016 Index weight Index weight Index weight Constituent Country Constituent Country Constituent Country (%) (%) (%) 13 Holdings <0.005 HONG KONG Anest Iwata 0.01 JAPAN AWE <0.005 AUSTRALIA 360 Capital Industrial Fund 0.01 AUSTRALIA Anicom Holdings 0.01 JAPAN Axial Retailing 0.01 JAPAN 3S Korea <0.005 KOREA Anritsu 0.01 JAPAN Azbil Corp. 0.04 JAPAN 77 Bank 0.02 JAPAN Ansell 0.04 AUSTRALIA Bandai Namco Holdings 0.1 JAPAN a2 Milk 0.02 NEW Anton Oilfield Services <0.005 HONG KONG Bando Chem Inds 0.01 JAPAN ZEALAND AOI Electronics <0.005 JAPAN Bank of East Asia 0.08 HONG KONG AAC Technologies Holdings 0.12 HONG KONG Aoki Holdings 0.01 JAPAN Bank of Iwate 0.01 JAPAN Abacus Property Group 0.01 AUSTRALIA Aomori Bank 0.01 JAPAN Bank of Kyoto 0.04 JAPAN ABC-Mart 0.03 JAPAN Aoyama Trading 0.03 JAPAN Bank of Nagoya 0.01 JAPAN Able C&C <0.005 KOREA Aozora Bank 0.07 JAPAN Bank of Okinawa 0.01 JAPAN Accordia Golf 0.01 JAPAN APA Group 0.12 AUSTRALIA Bank of Queensland Ltd. 0.05 AUSTRALIA Accordia Golf Trust 0.01 SINGAPORE Aplus Financial <0.005 JAPAN Bank of Ryukyus 0.01 JAPAN Achilles <0.005 JAPAN APN News & Media 0.01 AUSTRALIA Bank of Saga 0.01 JAPAN Acom 0.03 JAPAN APN Outdoor Group 0.01 AUSTRALIA Bapcor 0.02 AUSTRALIA Aconex 0.01 AUSTRALIA Apt Satellite <0.005 HONG KONG Beach Energy 0.01 AUSTRALIA Acrux <0.005 AUSTRALIA ARA Asset Management 0.01 SINGAPORE Beadell Resources 0.01 AUSTRALIA Adastria Holdings 0.01 JAPAN Arakawa
    [Show full text]
  • About Lotte Shopping
    LIFETIME VALUE CREATOR ANNUAL REPORT 2017 REPORT ANNUAL LOTTE SHOPPING AN INVITATION TO THE ENRICHED FUTURE OF RETAIL, CREATED BY THE NEW VALUES OF LOTTE SHOPPING Lotte Shopping Annual Report 2017 LIFETIME VALUE CREATOR Lotte Shopping established its vision of being a “Lifetime Value Creator”, which includes our pledge to offer REPORT OVERVIEW UNIQUE FEATURE customers the highest value for every purchase they make from us. In order to create new values that will make their lives 00 ABOUT LOTTE GROUP This annual report informs readers about Lotte Shopping’s This year’s report is designed to demonstrate 02 CEO'S MESSAGE more beautiful and enriched, we are leading the evolution of wide range of initiatives and achievements. In particular, Lotte Shopping’s commitment to adding new values to 06 INTERVIEW WITH THE CEO retail through continuous change and innovation. it introduces in detail our approach to realizing the future of customers’ lives with its new logo, Value Line. retail while strengthening our core competencies in channels, You will see the beautiful and luxurious image of the future innovations, customer satisfaction, and other areas, of retail, shown through the varied colors and shapes of in response to changes in trends, technologies, and lifestyles. Lotte Shopping’s Value Line logo. LEADING TRENDS IN RETAIL EXPERIENCE OMNI PAGE. 10-15 CONVERGING TECHNOLOGY AND INNOVATION EXPECT THE FUTURE OF RETAIL PAGE. 16-21 CREATING NEW LIFESTYLES AND VALUES ENJOY A FULLER LIFE PAGE. 22-27 Reader's Guide ABOUT LOTTE SHOPPING REVIEW OF OPERATIONS CSR MANAGEMENT 30 COMPANY PROFILE 62 LOTTE DEPARTMENT STORE 73 LOTTE SHOPPING’S CSR 32 FINANCIAL HIGHLIGHTS 64 LOTTE MART 74 CUSTOMER-CENTERED MANAGEMENT 34 GLOBAL NETWORK 66 LOTTE HIMART 76 ENVIRONMENTAL MANAGEMENT MORE INFORMATION 36 BOARD OF DIRECTORS 68 LOTTE SUPER 78 WIN-WIN PARTNERSHIPS Links to the related information of the contents in the report.
    [Show full text]
  • LOTTE Corporation
    [Korea] Conglomerates Lotte Corp. Buy (004990 KS) (Maintain) Key investment points TP: W40,000 ▼ Upside: 27.6% Mirae Asset Daewoo Co., Ltd. Dae-ro Jeong [email protected] Recent developments Acquisition of additional subsidiary stakes; inheritance tax report due by end of July Lotte Corp. recently acquired additional stakes in Lotte Foods (002270 KS/CP: W333,000; 23.1% 36.4%) and Lotte Global Logistics (44.6% 46.0%). Individual inheritance taxes on the assets of the late honorary chairman Shin Kyuk-ho must be filed by the end of this month. Regardless of the inheritance outcome, we believe Chairman Shin Dong-bin will maintain stable control over the group; we see limited risks of a battle for control. Investment points Consolidated earnings to recover in 2021; unlisted subsidiaries may be headed for IPOs We expect operating earnings of key subsidiaries—including Lotte Shopping (023530 KS/Trading Buy/TP: W105,000/CP: W78,000) and Lotte Chemical (011170 KS/Buy/TP: W240,000/CP: W171,500)—to recover in 2021 after bottoming in 2H20. We believe Lotte Corp.’s unlisted subsidiaries, such as Lotte Global Logistics and Korea Seven, will pursue IPOs. Lotte Group is likely to resume its push to list Hotel Lotte and subsequently merge the company with Lotte Corp., thereby completing its ownership structure overhaul. Investment recommendation Maintain Buy, but cut TP to W40,000 and valuation We cut our target price on Lotte Corp. to W40,000 (from W52,000) due to a drop in the value of the company’s stakes in affiliates (including Lotte Shopping).
    [Show full text]
  • LOTTE Kolson (Pvt.) Limited 2
    The Pakistan Credit Rating Agency Limited Rating Report Report Contents 1. Rating Analysis LOTTE Kolson (Pvt.) Limited 2. Financial Information 3. Rating Scale 4. Regulatory and Supplementary Disclosure Rating History Dissemination Date Long Term Rating Short Term Rating Outlook Action Rating Watch 09-Jun-2021 A- A2 Stable Maintain - 26-Jun-2020 A- A2 Stable Maintain YES 27-Dec-2019 A- A2 Stable Maintain - 27-Jun-2019 A- A2 Stable Maintain - Rating Rationale and Key Rating Drivers The ratings reflect Lotte Kolson (Pvt.) Limited’s ('Lotte Kolson' or 'the Company') association with Lotte Corporation, one of the biggest conglomerates of South Korea. Though food industry remained operational since Covid-19 outbreak, however, demand for snacks and confectionery remain low due to closure of schools and malls. The Company's revenue growth remained limited mainly due to government's regulation on unregistered distributors and an overall contraction in demand in snacks segment. Utilization of the Company’s state-of-the-art ‘Choco Pie’ plant remains low, though improving, due to slow market pick up of the product despite aggressive marketing campaigns. Business margins improved despite increase in raw material costs leading to profits at gross and operational level. The Company is focusing on changing its sales mix to higher margin products, such as pasta, and increasing capacity utilization of new plant through product innovation. The financial profile of the Company is characterized by strong working capital management due to its cash based sales and a moderately leveraged capital structure with long term loan at fixed rate. Loan deferment facility introduced by SBP provide during Covid-19 outbreak provided the necessary respite, however, coverages are still weak as the Company's cashlfows are under pressure.
    [Show full text]
  • Lotte Confectionery (004990 KS) Food & Beverage
    August 30, 2011 Company Report Lotte Confectionery (004990 KS) Food & Beverage Expecting overseas momentum Woon-mok Baek +822-768-4158 [email protected] Trim TP to W2,000,000; Maintain Buy rating Amy Lee We trim our target price for Lotte Confectionery to W2,000,000 (from W2,200,000) +822-768-3066 because: 1) the companyÊs 2Q11 domestic earnings were weaker than expected [email protected] due to unfavorable weather and cost increases, and 2) our 2011 earnings forecasts were cut to reflect the companyÊs bleak 3Q outlook (low temperatures are likely to dampen strong seasonality for the ice cream business). Although the companyÊs overseas operations remain brisk, their earnings contribution is still insufficient to offset domestic sluggishness. However, we maintain our Buy rating, taking into account: 1) an expected earnings rebound in 2012 and 2) the rosy secular growth prospects for the companyÊs overseas business. Buy (Maintain) 2Q11 Review: Weak at home, but brisk overseas Target Price (12M, W) 2,000,000 Share Price (11/08/29,W) 1,538,000 Lotte Confectionery reported lower-than-expected 2Q11 results (under consolidated Expected Return (%) 30.0 K-IFRS). Revenues and operating profit expanded only 9.3% YoY and 3.1% YoY, EPS Growth (11F, %) -33.5 respectively. Despite strong confectionery sales, domestic revenues fell below our Market EPS Growth (11F, %) 2.3 estimate, growing only 6.6% YoY, due to tepid ice cream sales (caused by frequent P/E(11F, x) 23.2 rains). With the companyÊs COGS climbing 15.2% YoY, operating profit growth Market P/E(11F, x) 9.7 KOSPI 1,829.50 lagged behind revenue growth in 2Q.
    [Show full text]
  • Lotte Confectionery (004990 KS)
    February 28, 2011 Korea-Equity Research Lotte Confectionery (004990 KS) Food & Beverage Woon-mok Baek +822-768-4158 [email protected] Amy Lee +822-768-3066 [email protected] Chinese business to take off in 2011 Buy (Maintain) Bloomberg: 004990 KS Target Price (12M, W): 1,850,000 Raise TP to W1,850,000; Maintain Buy rating Share Price (02/25/11, W): 1,370,000 Despite stable domestic operations, Lotte Confectionery’s share price has moved in line Expected Return (%): 35.0 with the KOSPI due to the sluggish performance of its overseas operations (especially Sector: Food Products in China). However, things will likely change, as the company’s Chinese subsidiary is Sector Rating: Neutral expected to show sales growth and swing to positive in 2011 following the completion of EPS Growth (11F, %): 13.2 restructuring. In light of this bright outlook for its Chinese operations, we maintain our Buy rating. Furthermore, we raise our target price to W1,850,000 (from W1,700,000) Market EPS Growth (11F, %): 24.2 because we revised up our 2011 earnings forecasts for the company. P/E (X): 12.7 Market P/E (02/25/11F, x): 9.6 Chinese operations to get back on track in 2011 Market Cap (Wbn): 1,947 Shares Outstanding (mn): 1 Until the end of 2010, Lotte Confectionery invested W500bn in its overseas business, but to no avail. The company’s overseas business only showed stagnant sales and Avg Trading Volume (60D, '000): 1 suffered an operating loss. Avg Trading Value (60D, Wbn): 2 Margin Balance ('000 sh): 0 However, the company’s sales in China are likely to turn upward in 2011, driven by: 1) the liquidation of its non-performing bonds and ailing customers in 2010, 2) localization, Dividend Yield (11F, %): .3 3) the expansion of direct operations, and 4) product portfolio diversification.
    [Show full text]