Chan Lee and Albert Yong presented their in-depth investment thesis on Korea Alcohol (017890) at Asian Investing Summit 2015.
Korea Alcohol is one of Korea’s leading manufacturers of specialty chemicals, including ethyl alcohol and ethyl acetate. Despite the recent slump of the chemical industry, the company has maintained a steady income thanks to its market dominant position in the oligopolistic industry. The company owns the controlling equity stake of ENF Technology (a publicly traded company), a manufacturer of process chemicals used in making semiconductors and TFT-LCD displays. The value of the company’s real estate property is worth nearly 50% of the market cap. The company can improve the shareholder value by selling off its real estate property and returning cash to shareholders. The company is a good example of holdco discount opportunities in Korea. The value of non-core assets is not properly reflected in the stock price of the company. The company’s liquidation value far exceeds its market cap.
About the instructors:
Chan H. Lee is the co-founder and a Managing Partner of Petra Capital Management. Since inception in fall 2009, its Petra Korean Value Equity Strategy has returned 23.7% annualized, net of all fees to investors. Chan is constantly on the lookout for mispricing opportunities and special situations where investors can profit handsomely from a subsequent change of valuation. Chan believes that Korea offers numerous investment opportunities for activist investors. Prior to co-founding Petra, he worked as an investment banker and corporate attorney for more than 10 years in Korea. Chan’s career has focused on the analysis and execution of mergers, acquisitions, joint ventures, restructurings and debt and equity financings across a broad range of industries. Chan received his JD from the UCLA School of Law and his BS in Business Administration from the University of California at Berkeley where he was a member of Beta Gamma Sigma.
Albert H. Yong is a Managing Partner and the CIO of Petra Capital Management, an investment advisory and portfolio management firm based in Seoul, Korea which focuses on undervalued Korean public companies whose market prices are significantly discounted to intrinsic value. Albert believes that the Korean stock market offers exceptional value investing opportunities because many Korean companies are still cheaply valued compared to their earning power and balance sheet. Albert utilizes a disciplined and patient deep value investing approach to seek superior risk-adjusted returns with limited volatility and bases his investment decisions on detailed, research-based analysis and thorough due diligence. Prior to co-founding Petra, Albert was a Managing Director and the CIO of Pinnacle Investments and a Vice President of Pan Asia Capital where he was in charge of managing the Korean equity portfolio. Albert received his MBA from the UCLA Anderson School of Management and his BS in Electrical Engineering from Seoul National University.
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