Conglomerates

Guest view: Time for Trump to give Seoul its due

25 Jun 2019

Struggling South Korea has been importing more U.S. goods while Lotte Chemical invests in Louisiana. In return, the White House should exempt the country from threatened auto tariffs and take it off a currency manipulators watchlist, says Korea Society President Thomas Byrne.

Evergrande can ill-afford an electric-car fantasy

21 Jun 2019

The property giant has already put over $4 bln into green vehicle brands and dealers. Now it plans to plough ten times that into research and factories; for the same money boss Hui Ka Yan could buy Tesla. But he’s no Elon Musk, and this could derail a debt clean-up.

Samsung reaps benefits of U.S.-China tech war

21 May 2019

Restrictions on Huawei’s use of American chips and software will make it harder to sell telecom gear outside the PRC. And Apple products could be vulnerable to a backlash in China. That leaves openings for the Korean group to sell network equipment as well as more smartphones.

Toshiba invites foreigners to strut their stuff

14 May 2019

The embattled $18 bln conglomerate nominated four non-Japanese directors to a more independent board. It’s a bold step in a country slowly rethinking corporate governance. Given previous failed experiments with outsiders, Toshiba’s experience will be a litmus test.

GE owners give Culp wrong kind of endorsement

8 May 2019

Shareholders of the U.S. conglomerate offered qualified support for the boss’s turnaround. They strongly backed his directors while casting a protest vote on pay. So it’s regrettable that they rejected a call for an independent chair, which could help avoid future problems.

GE’s decent quarter won’t stop the shrink

30 Apr 2019

The $85 bln conglomerate burned less cash than feared in the first quarter, but problems with Boeing’s 737 MAX jet bring new risk to the one division that was thriving. That leaves CEO Larry Culp with no growth engines, and the prospect of cutting GE into still smaller pieces.

P&G could gain from shaving off Gillette

22 Apr 2019

The consumer giant’s razor business, which it bought for $57 bln back in 2005, has been blunted by cheaper competition. Sales, profit and market share are shrinking. A new owner might be able to lavish more attention on Gillette, and leave P&G to focus on areas like healthcare.

Kraft Heinz new boss is a good palate cleanser

22 Apr 2019

Miguel Patricio is not an entirely fresh ingredient for the food company – he ran marketing at AB InBev, created by Kraft’s second-largest shareholder. Both companies have underperformed in recent years. That said, his focus on marketing may break the company’s holding pattern.

Korean Air CEO’s death sends grim chaebol message

8 Apr 2019

Cho Yang-ho has died at 70 just weeks after shareholders ousted him from the carrier’s board. The family-controlled holding company’s market value promptly soared by a fifth. Momentum for Korean corporate reform may be slowing, but this reaction suggests investors yearn for more.

China property giants face call of tech sirens

27 Mar 2019

The $45 bln Evergrande and peers reported bumper earnings for last year despite slowing overall sales. Home prices are rising, debt is stabilising and policy seems friendlier. Shareholders could relax, were developers not also plowing into electric cars and robots.

Tencent needs new obsession to replace video games

21 Mar 2019

The web giant’s fourth-quarter earnings slumped by nearly a third to $2 bln as Chinese curbs on mobile games took effect. Bets on payments and cloud computing have yet to pay off, and Tencent’s M&A record is patchy. Investors deserve a clearer idea of where it’s headed next.

Hyundai shareholders can have it both ways

20 Mar 2019

Activist Elliott wants $7 bln in payouts from the South Korean autos group. Though Hyundai's R&D track record is weak, it can’t afford to throttle investment in the latest technology. Better to back the conglomerate's stingier proposals and then push for another modest dividend.

Blackstone’s round trip brightens HNA attractions

12 Mar 2019

The private equity shop is buying back control of a Hong Kong construction company it sold to the Chinese group in 2016. The $900 mln price tag belies a slug of cash that comes with it. That makes the valuation inviting and may increase interest in HNA’s sprawling portfolio.

Hype trumps reality in Ambani’s shopping empire

12 Mar 2019

Reliance Retail is India’s top brick-and-mortar vendor, a fast-growing conglomerate within the tycoon’s $118 bln energy-to-mobile giant. Now it is emerging as the top threat to Amazon and Walmart’s local ambitions. Its numbers, though, are a mixed bag.

Hard times favor skinny conglomerates

28 Feb 2019

Kraft Heinz’s stumble has dealt another blow to the notion of the diversified roll-up M&A machine. United Technologies, GE and Newell Brands had already got that message. Conglomerates can still work if they stay lean and keep cash on hand. Take Kraft investor Berkshire Hathaway.

Driving hard bargain could backfire on Hyundai

27 Feb 2019

The Korean conglomerate's auto-parts unit has offered less than half the $2.2 bln dividend wanted by pushy Elliott. Meanwhile, Hyundai's carmaker rejected another of the activist's proposals. Stingier options may cost it investor support when it comes to a broader restructuring.

GE’s return to the black is a baby first step

31 Jan 2019

A profit in Larry Culp’s first quarter as CEO can’t hide his challenge. The $80 bln conglomerate’s troubled power unit dented sales and hammered earnings in its trio of core businesses, and disposals have yet to meaningfully cut leverage. He needs to put more imagination to work.

Sinochem’s backtrack sends a fresh IPO warning

31 Jan 2019

The Chinese chemicals and oil giant has paused plans to float its refining and trading unit in Hong Kong. Beijing’s behemoths once listed regardless of market conditions, thanks to government-backed peers. The $2 bln U-turn should worry hopefuls without state support.

HNA’s haphazard selloff keeps getting trickier

9 Jan 2019

The Chinese conglomerate is flogging stakes in an online lender, life insurer and brokerage. A lack of clear strategy and market perceptions of creditor clout will make it harder to profitably unwind HNA’s $50 bln buying spree. Falling asset prices aren’t helping, either.

Samsung’s bad news intensifies $70 bln cash bind

8 Jan 2019

The South Korean giant says quarterly operating profit likely fell to a worse-than-expected $10 bln. With chip prices set to drop further, Jay Y. Lee can draw on his cash pile to boost investor returns and invest in new tech, like 5G. His track record in both is less assuring.