Breakingviews

Sickly Lotte IPO reflects two faces of South Korea

June 13, 2016

Seoul may be Asia’s coolest destination right now, and Lotte Group’s flagship duty-free arm ought to profit handsomely. But raids have derailed the unit’s $4.5 bln listing and drawn attention to Korea’s uglier side: its powerful, opaque and poorly governed conglomerates.

Global smartphone brands face mass extinction

December 23, 2015

The industry’s growth has slipped below 10 pct for the first time. Apple and Samsung’s high-end phones are taking most of the spoils while upstarts like China’s Xiaomi pick up first-time buyers. Loss-making brands like HTC and Sony may be forced to conclude the game is over.

Samsung investors learn the benefit of family ties

December 9, 2015

The heir to South Korea’s top conglomerate has pledged to backstop troubled Samsung Engineering’s $1 bln rights issue. Jay Y. Lee may avoid reaching into his own pocket. Yet for investors, it’s a reminder that being part of a larger group has benefits as well as drawbacks.

South Korean web bank hopes ignore offline gloom

December 1, 2015

The country has given the green light to two groups to set up internet-only banks. Foreign web giants including Alibaba and eBay have joined local companies to back the new ventures. The euphoria is oddly disconnected from the poor returns earned by country’s largest lenders.

Samsung shows investors it can be generous too

October 29, 2015

The South Korean group plans to buy back stock worth $10 bln and pay out up to half of its free cash flow in dividends. That will shrink its cash pile and may help the Lee family reorganise their empire. It’s a small but welcome sign that restructuring can benefit shareholders.

Samsung’s future is more Intel, less Apple

October 7, 2015

The South Korean giant’s operating profit topped $6 bln in the third quarter – the first improvement since 2013. While smartphone sales are struggling, Samsung’s chip business is increasingly powering its bottom line. Future growth will depend more on components than handsets.

Tesco’s global hopes can survive Korea sale

September 4, 2015

Britain’s biggest grocer is close to selling its supermarkets in South Korea, reports say. The mooted 4.3 bln stg proceeds would cut net debt in half and relieve operational headaches. Yet an exit need not be the end of Tesco’s international ambitions.

South Korea might need stronger medicine than QE

July 23, 2015

The slowest quarterly GDP growth in six years points to a malaise deeper than a virus outbreak. A weaker currency can help with faltering exports, but it won’t free households from a debt trap. A bold cocktail of tax breaks, rebates and money-printing might be more effective.

Samsung clan could call on mobile unit next

July 22, 2015

Investors may wonder how Samsung Electronics fits into the plans of the Lee family behind the South Korean chaebol. A rejig of the $180 bln smartphone giant could spur higher dividends. But the Lees’ recent win against Elliott suggest independent shareholders may suffer first.

Samsung win is bittersweet for ruling Lee family

July 17, 2015

A $9 bln intergroup merger was narrowly passed, despite opposition led by Elliott. That helps the family’s succession planning. But the U.S. activist may fight on. And the spat shows South Korea’s largest conglomerate is vulnerable to restive shareholders as it restructures.