Sempio Foods (248170 KS) is Korea’s leading soy sauce producer. It has a 60% market share for soy sauce domestically and strength in a variety of related condiments such as bean pastes and chilli sauces. The company was initially established as the Samsi Soy Sauce Brewery in 1946. Founding father Park Kyu-Hoe and his son were obsessed with product quality. Profitability had been weak throughout most of the company’s history, however, with management prioritising market share gains over profitability.
I spent a few hours looking at this and their translated reports. The food co is a consolidated subsidiary of the holding co, among a few other smaller ones. Seems like the holding company is a better deal given their percentage ownership and market prices of both, and most of the founding family own at the holding level. I'm most frustrated that I can't find a clear and compelling explanation for the spin off in 2016 but some Korean news at the time cited chaebol (large family owned companies) reform. Despite the stated purpose of transparency it makes analysis more complex and appears politically motivated. Sure looks good in comparison to kikkoman.
Very random question on an unrelated post - but do you know of Kadoya Sesame Mills, Michael? It’s a highly profitable Japanese manufacturer of sesame oil, with a growing international presence. The company has put up some remarkable ROE numbers for a company employing no debt. I’ve been buying shares recently as the present valuation is very attractive imo. Anyway, just seemed like the type of business that would be right up your alley. Thanks.
I spent a few hours looking at this and their translated reports. The food co is a consolidated subsidiary of the holding co, among a few other smaller ones. Seems like the holding company is a better deal given their percentage ownership and market prices of both, and most of the founding family own at the holding level. I'm most frustrated that I can't find a clear and compelling explanation for the spin off in 2016 but some Korean news at the time cited chaebol (large family owned companies) reform. Despite the stated purpose of transparency it makes analysis more complex and appears politically motivated. Sure looks good in comparison to kikkoman.
Very random question on an unrelated post - but do you know of Kadoya Sesame Mills, Michael? It’s a highly profitable Japanese manufacturer of sesame oil, with a growing international presence. The company has put up some remarkable ROE numbers for a company employing no debt. I’ve been buying shares recently as the present valuation is very attractive imo. Anyway, just seemed like the type of business that would be right up your alley. Thanks.
Thanks for the write-up Michael - what's the liquidity like?