KCC stocks rise after Everland IPO revealed

While the primary stock market Kospi saw a mild increase yesterday, Samsung stocks and Samsung Everland-related stocks surged after the de facto holding company of Samsung Group announced its plan for an initial public offering next year.

The biggest winner yesterday was KCC, which is the second-largest stakeholder in Samsung Everland. KCC, a construction materials and paint company, saw its shares skyrocket nearly 11 percent to close at 660,000 won ($644).

The largest shareholder of the de facto holding company is the heir apparent of Samsung Group, Jay Y. Lee, who owns 25.1 percent, while KCC owns 17 percent, or 425,000 shares.

Brokers estimate that KCC will earn a profit of between 400 billion won and 600 billion won from the IPO. The market is estimating that the market capitalization of the Samsung holding company after the IPO will be 7 trillion won to 8 trillion won. If so, the shares owned by KCC will be worth about 1.2 trillion won to 1.4 trillion won.

In late December, KCC bought 17 percent of the 25.64 percent shares that Samsung Card had in Samsung Everland for 1.82 million won per share. In total, KCC paid 773.9 billion won for the stakes.

The purchase drew the interest of the market as KCC hails from Samsung’s rival conglomerate Hyundai Group. The company was established by Hyundai Group founder Chung Ju-yung’s younger brother Chung Sang-young. The acting chairman of KCC is Chung Ju-yung’s son Chung Mong-jin, who is the cousin of Hyundai Motor Group Chairman Chung Mong-koo.

At the time of the exchange, Samsung Card was ordered by the nation’s top financial authorities to sell its shares in Samsung Everland under the law that bans financial companies from owning more than a 5 percent stake in a nonfinancial company.

Many questioned why KCC would purchase Samsung Everland shares at such a high cost, especially when the possibility of Samsung Everland being publicly traded was uncertain.

Many of the Samsung stocks were up yesterday, with some increasing almost 5 percent. Samsung Card saw the sharpest increase as it gained 4.82 percent followed by Samsung C&T, which went up 4.66 percent. Samsung Life Insurance saw its shares increase nearly 4 percent.

BY lee ho-jeon [ojlee82@joongang.co.kr]