On March 24, 2025, Lotte Global Logistics, led by CEO Kang Byeong-gu, took a significant step toward its initial public offering (IPO) by submitting a securities registration statement to the Financial Services Commission. The company is set to list on the KOSPI, marking an important milestone in its development. The IPO is generating buzz in both the financial market and within the logistics industry, as the company prepares to offer 14,944,322 shares at a proposed public offering price range of 11,500 to 13,500 KRW per share.
Based on the highest end of the offering price, the estimated total amount to be raised from the public offering is about 201.7 billion KRW. The demand forecast for institutional investors is scheduled to take place from April 24 to April 30, 2025, with general subscriptions planned for May 12 and 13, 2025. The lead underwriters for this IPO are prominent names in the financial sector, including Korea Investment & Securities and Samsung Securities, along with KB Securities serving as a co-lead underwriter.
Lotte Global Logistics is a comprehensive logistics company affiliated with the Lotte Group, providing services in domestic and international delivery, supply chain management (SCM), and global logistics. The company operates a mega-hub terminal in Jincheon and maintains a robust network comprising 21 terminals, 37 branches, and over 1,000 agencies across South Korea. This extensive network enables Lotte Global Logistics to process approximately 500 million parcels annually, securing its position as the second-largest market player in the domestic delivery market.
In recent years, Lotte Global Logistics has focused on enhancing logistics processing efficiency. This includes the introduction of automated equipment and the expansion of sub-terminals to facilitate a complete transition to a 'Hub & Spoke' logistics system. In areas like supply chain management, the company leverages IT-based solutions, including warehouse management systems (WMS) and transportation management systems (TMS), for real-time tracking of inventory and transport, thereby enabling automated order processing. Such innovations allow customers to monitor their logistics status in real-time while supporting expedited, data-driven decision-making.
On the global front, Lotte Global Logistics aims to bolster its competitive edge by offering a variety of services, including forwarding, intermodal transport, port operations, and cross-border e-commerce (CBE). The company's commitment to quality is reflected in its recent acquisition of the 'CEIV Li-Batt' certification, demonstrating its capability to transport batteries and special cargo effectively. Future plans include establishing additional global logistics bases in strategic locations such as Incheon, Hong Kong GDC, Busan Port, and Singapore to further enhance its international footprint.
Financially, Lotte Global Logistics reported a notable increase in operating profits for 2024, with a 41.12% year-over-year improvement resulting in 90.2 billion KRW. Additionally, the company achieved a staggering surge of 173.32% in net profit, reaching 40.5 billion KRW, although its revenue saw a slight decline of 1.13% to 3.57 trillion KRW.
CEO Kang Byeong-gu commented on the company's strategic goals following the IPO, stating, "We will enhance our competitiveness through advanced logistics infrastructure and strengthened global networks using the funds secured through the listing." This indicates a clear commitment to leveraging the IPO proceeds to increase the company’s presence in the global logistics market.
However, the IPO process comes with significant stakes for Lotte Group, considering the financial implications tied to the investment from LLH, a second-largest shareholder with a 21.87% stake. LLH had previously invested 286 billion KRW and established a contractual arrangement mandating Lotte Holdings and Hotel Lotte to cover any financial discrepancies if the IPO price does not meet expectations. The put option linked to this investment is a key concern for Lotte Group. If the public offering price is set at the lower end of the range, Lotte Holdings and Hotel Lotte could be accountable for up to 293.1 billion KRW to LLH.
Market analysts note the mixed outlook for the IPO. The decrease from earlier valuation expectations of 1 trillion KRW is viewed as a positive factor for attracting investor interest. In a market continuously influenced by fluctuating valuations and the performance of comparable firms like CJ Logistics and Hanjin, Lotte Global Logistics must solidly present its generous growth prospects. In the wake of stagnant revenue, declining from 3.999 trillion KRW in 2022 to 3.573 trillion KRW in 2024, strategizing to enhance visibility in the logistics sector remains central.
To address investor concerns regarding future growth potential, Lotte Global Logistics is committed to showcasing its vision and goals during upcoming investor relations activities in preparation for the IPO. As the dates for institutional demand forecasts and general subscriptions approach, the market's attention remains fixed on whether this prominent IPO will live up to its expectations.
In conclusion, the upcoming IPO for Lotte Global Logistics encapsulates not just a financial strategy, but a significant strategic pivot in the ever-evolving logistics industry landscape, with both corporate and investor interests on the line.
