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KH's evolutionto Holding Company 2010. 04. 08. Fantastic 4 Real coreSmart bear Record history Hero from eastSoft spreadCarve river
Executive Summary ,[object Object]
We took the view of the FI responsible for Kumho Industrial, Asiana Airlines, and Korex and examined each company to figure out a way for the FI to receive their investments with a 9% return.
Our overall strategy was to liquidate the construction and bus part of Kumho and use that money to reduce the liabilities of Asiana. With the financial help from Kumho, Asiana can resume operations in the black and by developing into an LCC, can capture additional market share and provide cash for the Kumho, which will become a holding company in the future to either invest or reduce its own liability.
Korex is financially healthy and therefore does not need financial help, but with Asiana positioning to become an LCC, can work in liaison with Asiana to focus on air express distribution, an area with high profit margins.
In the end, we expect these steps to provide the FI with either a 9% or more return on their investment over the years and after 2014, FI’s can either sell their shares or the rest of the companies, depedning on which course of action is likely to provide higher returns. ,[object Object]
agenda Current Situation of KH Goal Setting Corporate Strategies Final Overview
Current Situation of KH Among KumhoAsiana Group ‘s 3 parts - KDB’s part, Park brothers’ part, and Financial Investor’s part-, we will take the FI’s point of view. Separated KumhoAsiana Group 2 Park brothers’ part ,[object Object]
If they couldn’t make a visible achievement until then, they will be retired.1 2 3 Financial Investors 3 Financial Investor’s part Kumho Industrial Kumho Petro-chemical Daewoo Construct-ion ,[object Object]
They decided to pick a professional CEO(not owner) and let him run the company.Asiana Airlines Kumho Tire Korex How to revitalize ?! The reasons why we took FI’s point of view ,[object Object]
 Practically, the CEO can control only 3 selected company.,[object Object]
Goal Setting From the FI’s point of view, the goal should be to maximize the return of investment by revitalizing the business. Why 9%? FI’s Goal ,[object Object]
By this, we can infer that 9% minimum rate of return that FI require. Increase Sales for the rate of 9% Corporate Goals Kumho Industrial Asiana Airlines Korex (2014E) ,713,161M (2014E) ,980,939M (2014E) ,818,297M
agenda Current Situation of KH Goal Setting Corporate Strategies Final Overview
Strategies Overview From the FI’s point of view, the goal should be to maximize the return of investment by revitalizing the business. Blueprint of Strategy Current Situation Short term Strategy (~2014) Long term Strategy (2014~) Kumho Industrial Cash flow : 1,500 B. Asiana Airlines Cash flow  Synergy Korex
Kumho Industrial – BCG Matrix From the FI’s point of view, the goal should be to maximize the return of investment by revitalizing the business. Y axis: “Market Attractiveness”  High Construction ,[object Object],Asiana Kumho Industrial Expecting Synergy or not Expecting Synergy or not Korex Low High Buslines ,[object Object],X axis:  “Our Company’s Performance” M/S of Construction industry Construction ,[object Object],  M/S of construction industry. Kumho Others Synergy Buslines ,[object Object],(13% of total sales in KH) ,[object Object],Kumho Industrial is unattractive and therefore bears further examination. Source: 1) CBSI: Construction and Economy Research Institute of Korea, 2) National bus transportation organization
Kumho Industrial - Divest KH is facing liquidity problems in an industry where it lacks competitive strength while the industry itself has growing liquidity problems. Industry Structure and Competitiveness Competitive Strength Construction capability Index (in millions) Has Not have Favorable Harvest or Divest Quickly Leadership  Or  Niche 12   Kumho Construction   2,382,814 No Competitive Strength!  Industry  Structure ,[object Object]
But has great presence in an industry with a growing liquidity problem.Default rate(%)  Divest  Quickly Harvest or  Niche PF Balance (Trillion) Unfavorable 06       07       08       09 Leadership – Become best company in that market segment 1 Niche – Identify a segment that is stable, has high returns, and focus on that segment. 2 Strategy Harvest – Controlled disinvestment for high cash flow 3 Divest Quickly – Sell off quickly before it declines further 4 ,[object Object],[object Object]
After selling off assets, KH becomes holding company.
FI  would prefer holding company for ease of transaction.
Asiana and Korex provides much cash for investment.
FI can use their human network to easily staff a holding company ()human resource intensive Valuation in appendix
Asiana Airlines - BCG Matrix Considering relevant information, Asiana airlines is considered a “Cash cow” that we can utilize as our revenue stream. High Y axis: “Market Attractiveness”  ,[object Object]

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[금호 그룹]금호의 Turn Around 전략

  • 1. KH's evolutionto Holding Company 2010. 04. 08. Fantastic 4 Real coreSmart bear Record history Hero from eastSoft spreadCarve river
  • 2.
  • 3. We took the view of the FI responsible for Kumho Industrial, Asiana Airlines, and Korex and examined each company to figure out a way for the FI to receive their investments with a 9% return.
  • 4. Our overall strategy was to liquidate the construction and bus part of Kumho and use that money to reduce the liabilities of Asiana. With the financial help from Kumho, Asiana can resume operations in the black and by developing into an LCC, can capture additional market share and provide cash for the Kumho, which will become a holding company in the future to either invest or reduce its own liability.
  • 5. Korex is financially healthy and therefore does not need financial help, but with Asiana positioning to become an LCC, can work in liaison with Asiana to focus on air express distribution, an area with high profit margins.
  • 6.
  • 7. agenda Current Situation of KH Goal Setting Corporate Strategies Final Overview
  • 8.
  • 9.
  • 10.
  • 11.
  • 12.
  • 13. By this, we can infer that 9% minimum rate of return that FI require. Increase Sales for the rate of 9% Corporate Goals Kumho Industrial Asiana Airlines Korex (2014E) ,713,161M (2014E) ,980,939M (2014E) ,818,297M
  • 14. agenda Current Situation of KH Goal Setting Corporate Strategies Final Overview
  • 15. Strategies Overview From the FI’s point of view, the goal should be to maximize the return of investment by revitalizing the business. Blueprint of Strategy Current Situation Short term Strategy (~2014) Long term Strategy (2014~) Kumho Industrial Cash flow : 1,500 B. Asiana Airlines Cash flow Synergy Korex
  • 16.
  • 17.
  • 18.
  • 19. After selling off assets, KH becomes holding company.
  • 20. FI would prefer holding company for ease of transaction.
  • 21. Asiana and Korex provides much cash for investment.
  • 22. FI can use their human network to easily staff a holding company ()human resource intensive Valuation in appendix
  • 23.
  • 25.
  • 26.
  • 27. Received “Airline of the Year” by ATW for the first time for a domesticairline. 2006 2007 2008 2009 Unit : 100Mil KRW Asiana airlines is still attractive to keep and provides stable revenue and cash.
  • 28. Asiana Airlines - Why LCC? The LCC market itself is increasing and has a higher operating margin than conventional airlines which is why ASIANA should expand into the LCC business Market-size increase Higher Operating Margin Network Legacy Carriers World Europe No.1 Low Cost Carriers Ryan air 21% 70% 95% USA No.1 30% 5% Southwest 10% Low Cost Carriers 2001 2008 Korea Asia No.1 Air Asia 13% 72% 100% SouthAmerica No.1 28% Gol Airlines 17% * IATA 2008 2001 2008 Market Share of LCCs in Korea 1 Air Busan28% 2 Jin Air 26% Jeju Air 19% 3 (ASIANA)
  • 29.
  • 30.
  • 32.
  • 33.
  • 34.
  • 35.
  • 36. Growth rate in 2010 is expected to 11.8% .
  • 37.
  • 38.
  • 39. National power + business capacity in Asia region.
  • 40. Land+ Harbor + Air route possible -> a short-term step in prep. for long-term goal
  • 41.
  • 42.
  • 43. agenda Current Situation of KH Goal Setting Corporate Strategies Final Overview
  • 44.
  • 45.
  • 46.
  • 47. THANK YOU FOR LISTENING
  • 48.
  • 49. (사례) 속리산 고속(버스 90대, 매출 160억)을 2년 전에 300억 원에 샀다
  • 50. (적용)금호고속 (매출2000억 원, 점유율 40%) 기업규모 13배
  • 51.
  • 52. (사례) 쌍용건설 도급순위 13위 매출 1조 8천(2009년), 1조원 가격 불렀다. 동국제강이 사려고 했는데 당시 기사 보면 가격이 reasonable했다는 기관의 평가.
  • 53. (적용) 금호산업 현재 14위, 매출 2조 1천억(2008년)
  • 54. 금호건설 1조원 예상시간 관계상 DCF 나 EV/EBITDA 는 볼 수 없었던 점 양해해 주시기 바랍니다.