LX International’s value soars on cryptocurrency, GAM mine in Indonesia

LX International Corp., the trading unit of South Korea’s LX Group, has seen its enterprise value rise by two-thirds over the past three months, driven by gains from its investment in an Indonesian coal mine and a cryptocurrency.

Shares of LX International, listed on Korea’s main bourse, finished Wednesday 2% lower at 37,550 won, bringing its market capitalization to 1.46 trillion won ($1.15 billion). That’s up 66%, or 579.4 billion won, from a market cap of 876 billion won in late January.

The significant rise in its corporate value came as the company reported record sales and operating profit in the first quarter.

LX International, formerly LG International, said on Wednesday its revenue in the January-March period rose 33.5% on-year to a record 4.92 trillion won and operating profit more than doubled to an all-time high of 245.7 billion won.

The stellar business performance was boosted by its equity gains from the Ganda Alam Makmur (GAM) coal mine in Indonesia.

The opencast mine, operated by PT Ganda Alam Makmur, a subsidiary of LX International, and its partner Titan Infra Energy, posted an estimated 120 billion won in operating profit in the first quarter, as the bituminous coal price in East Kalimantan, Indonesia, shot to $161.3 a ton in the quarter from $79.21 in the year-earlier period.

CRYPTOCURRENCY GAINS

LX International’s earnings were also boosted by gains from its holdings of KLAY, a digital coin traded on Klaytn, a Korean cryptocurrency and blockchain development platform. Klaytn is operated by Kakao Corp.’s blockchain unit Ground X.

LX International recently became a member of Klaytn’s board, the governance council, to enter the cryptocurrency business. LX owns 6.62 million KLAY coins worth 7.3 billion won.

Industry officials said the company’s enterprise value will rise further as it is actively expanding its business scope.

In July, LX International will complete its acquisition of a 63.3% stake in Poseung Green Power Co., a local biomass power plant operator, for 95 billion won.

Last December, LX International acquired a 100% stake in Hankuk Glass Industries Inc. (HanGlas) for about 600 billion won.

The company is also widely expected to play a role in LX Group’s bid for US-listed Magnachip Semiconductor Corp.

On Tuesday, investment banking industry sources said the group will submit a letter of intent (LOI) to acquire the chipmaker as early as next week to create synergy with the group’s foundry affiliate, LX Semicon Co.

The acquisition bid will be led by LX Semicon and LX International, the cash cow of the group, according to industry officials.

Write to Ik-Hwan Kim at lovepen@hankyung.com
In-Soo Nam edited this article.