Rebirth for Debt Workout Firms
Rebirth for Debt Workout Firms
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  • 승인 2006.02.01 12:01
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Formerly bankrupt firms like Daewoo International Draw Increasing attention on Korea's stock market Debt workout companies such as Daewoo International, SK Networks, and Daerim Corporation are reviving as they attract big attention in Korea's stock market from investors along with their performance improvement. The most prominent example of such turnarounds is probably that of Daewoo International, whose annual net profit was no more than 2.5 billion won (approx. $2.55 million) in 2001 when the company went into workout. However, by 2004 its annual net profit amounted to 114 billion won (approx. $115.61 million), when the company graduated from workout Last year, Daewoo International had already exceeded the previous year's net profit scale, gaining net profit 137.4 billion won ($139.35 million) up to the third quarter. Accordingly, Daewoo International is assessed to be reborn as a blue-chip enterprise as the company's annual net profit scale increases 55 times within just four years since its workout program began. The company's financial structure also has become solid as its debt ratio decreased to 116.9% as of the end of September, 2005. In terms of the aggregate value of listed stocks too, an absolute index to represent stock value, Daewoo International's aggregate value of listed stocks has increased 64 times from 65 billion won ($65.92 million) in March 2001 to 4.1130 trillion won (approx. $4.1 billion) as of Jan. 20 this year. Moreover, Daewoo International gets high assessments in terms of growth possibility as well. Along with this, SK Networks rebirth story too, which has its workout graduation ahead, has grabbed attention. Creditors who invested their money into SK Networks stocks in the interests of SK Networks management normalization after the company's workout in March, 2003, are likely to not need to worry about damage concern at the least as its stock price amounts to 14,450 won (approx. $14.65) as of Jan. 20, 2006 from 8,750 won (approx. $8.87) at that time. As the increase of the aggregate value of listed stocks is striking in workout companies over recent three years, the stock market is giving good marks to the management improvement of workout companies. For instance, the aggregate value of listed stocks of Hyundai Corporation has increased 759.2% from 71 billion won ($72 million) on Jan. 20, 2003 to 610 billion won (($618 million) as of Jan. 20, 2006 over the past three years. Over the same period, the aggregate value of listed stocks also in Hyundai Engineering & Construction and Daerim Corporation increased 510.1% and 2375% respectively. However, the increase of the aggregate value of listed stocks is not entirely good, since it imposes a burden on M&A. Samsung Electronics & Heavy Industry is also likely to greatly increase trading profits. Among Samsung Group affiliate companies, this year's performance and stock price outlook about IT affiliate companies appeared to be positive whereas some affiliate companies get not-bright stock price outlook. First off, Samsung Electronics is emerging as a prime stock of this year stock market. An analyst at Good Morning Shinhan Securities said: "Samsung Electronics is forecast to gain 68.5000 trillion won (approx. $700 billion) and 12.1000 trillion won (approx. $12 billion), up 19.2% and 50.4% in comparison with the preceding year respectively this year". In the stock market's adjustment period, experts explain that institutional investors or foreigners tend to hold Samsung Electronics stocks for the sake of portfolio stability. Samsung Techwin outlook also is bright. An analyst at Hyundai Securities presents Samsung Techwin's target stock price as 28,000 won (approx. $28.39), explaining that full-scale performance improvement is possible from this year by succeeding in turnaround. Assessments about Samsung SDI and Samsung Electricity cross each other. An analyst at Daeshin Securities who said that the company's profitability will be improved continuously according to market enlargement and competitiveness strengthening, presented the company's goal stock price as 122,000 won ($123.73). Yet, Hyundai Securities cautions that the company's additional stock price increase is a little burdensome, explaining that additional expenses will happen due to CRT business restructuring initiated from last year.

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