Table of Contents
- Lotte Global Logistics Withdraws IPO Amid Domestic and International Uncertainties
- "Proper Value Assessment is Difficult"…Results of Demand Forecasting Were Below Expectations
- Confident in Business Performance…Continuing Global Expansion and New Business Investments
- When Will the Relisting Challenge Occur? "Will Pursue Again When Market Conditions Stabilize"
- More Important than Market Judgments is the Soundness of the Company
Lotte Global Logistics Withdraws IPO Amid Domestic and International Uncertainties
Lotte Global Logistics, the logistics subsidiary of Lotte Group, has submitted relevant documents to the Financial Services Commission to withdraw its listing plans.
This news, which will have a significant ripple effect on this year's domestic IPO market, is expected to serve as an important reference point for other companies preparing for listing.
I had written an analysis article on the investment in Lotte Global Logistics' public offering, but unfortunately, the suspension of the listing process is disappointing.
"Proper Value Assessment is Difficult"…Results of Demand Forecasting Were Below Expectations
Lotte Global Logistics began the public offering process aiming for a KOSPI listing in March. The proposed range for the public offering price was between 11,500 won and 13,500 won per share, and the total expected amount was estimated to be around 171.8 billion to 201.7 billion won. However, the results of the institutional investor demand forecasting conducted from April 24 to 30 were below expectations, which directly led to the postponement of the IPO.
The company cited "an increase in domestic and external uncertainties due to trade disputes and volatility in the financial markets, making it difficult to value the company appropriately," as the reason for the postponement. Considering this background, investment sentiment has declined, and ultimately the overall listing schedule has been reviewed. As a result, interest in future listing schedules and strategies has increased significantly.
Confident in Business Performance…Continuing Global Expansion and New Business Investments
Although Lotte Global Logistics' IPO has been postponed, the company's business expansion and medium-to-long-term strategies are expected to proceed as planned.
A company official revealed that they are designing automated logistics centers and cold chain logistics centers in the US and Vietnam, and are establishing a logistics corporation based on EPC in Egypt. This has been emphasized as part of a strategy for global network expansion.
Moreover, they are entering the logistics markets specializing in emerging growth industries such as secondary batteries, hydrogen, and ammonia, establishing a stable revenue structure, and these efforts are expected to greatly contribute to creating synergies at the group level.
When Will the Relisting Challenge Occur? "Will Pursue Again When Market Conditions Stabilize"
Lotte Global Logistics has stated that they will pursue relisting again when the current financial market conditions improve and the company can be properly valued.
The withdrawal of the listing is a result of the poor demand forecasting, which can be viewed as a strategic decision that often occurs in a fluid market environment. Therefore, it can be said that there is ample opportunity for future relisting possibilities.
Diverse strategies will be needed for reevaluation of corporate value, restoration of investor confidence, and realization of public offering price. Considering these circumstances, it is projected that whether or not to resume the IPO within the next few quarters will serve as an important indicator for listings of logistics and transportation-related companies.
More Important than Market Judgments is the Soundness of the Company
The postponement of Lotte Global Logistics' IPO seems to be a choice made to enhance long-term corporate value rather than aligning with market expectations.
If they strengthen their core competitiveness in line with changes in the logistics industry and continuously pursue global strategies, there is a possibility of receiving a higher evaluation when attempting the IPO again in the future.
Investors should recognize that this case highlights the need for deeper analysis not only regarding the listing itself but also concerning medium-to-long-term growth potential, business strategies, and global expansion capabilities.
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