DEEP RESEARCH · LX INTERNATIONAL/TRADING COMPANY CAPITAL ALLOCATION
LX International, POSCO International, and Samsung C&T Resource-Use Review
A 2019~2024 comparison of investments, ROI/ROIC, revenue and profit contribution, and shareholder returns
0. Bottom line first
Looking at resource use and investment performance from 2019 to 2024, I think POSCO International is ahead on ROI/ROIC and shareholder-return policy. LX International stands out for business transition and high dividends, while Samsung C&T has strong investment outcomes but weak linkage to shareholder value.
- POSCO International: the strongest ROI/ROIC profile and a policy to return 50% of net income to shareholders from 2025.
- LX International: the key strengths are its shift from short-term coal profits into nickel, eco-friendly materials, and M&A, plus a 5~8% dividend yield.
- Samsung C&T: investments in Samsung Biologics and SMR are meaningful, but the connection to dividends and treasury-share cancellation remains weak.
1. LX International: from resources to eco-friendly materials
Official fact: In 2019, LX International sold a 25% stake in LG Beijing Twin Towers for about KRW 341.2 billion, freeing capital for resource development and new businesses.
Interpretation: I view that sale as capital redeployment, not just disposal. It created capacity for new mine investment and M&A while moving cash back into core businesses.
Indonesian plantation expansion
In 2019, LX acquired a 95% stake in an Indonesian palm-oil plantation with an investment of about KRW 67.8 billion. Palm-oil output rose 33% year over year in 2020, and the 2021 palm-oil price increase maximized returns.
GAM and Wantugou mines
Production at Indonesia's GAM mine rose 32% to 10 million tons, while China's Wantugou mine tripled output to 2 million tons. During the 2021~2022 coal-price spike, LX International recorded KRW 900 billion in operating profit, its highest ever.
AKP nickel mine
In 2023, LX acquired a 60% stake in Indonesia's AKP nickel mine for about KRW 133 billion. The purpose was to secure a key EV-battery resource, with an annual target of 3.7 million tons and meaningful earnings expected after 2026.
Hanglas acquisition
In 2022, LX acquired 100% of Hanglas for KRW 592.5 billion. The aim was to enter architectural and solar glass and create group synergy, with expected annual operating profit of KRW 30~40 billion and investment return of 5~7%.
From a capital-allocation perspective, LX International raised its dividend from KRW 300 per share in 2019 to KRW 3,000 in 2022 and KRW 2,000 in 2023. The payout ratio stayed around 37%, while dividend yield was 5~8%, high versus peers. I think the strategy of moving short-term coal profits into nickel, eco-friendly materials, and M&A was appropriate. Still, coal carries long-term decarbonization risk, so the cash-flow proof from nickel and glass after 2026 matters.
2. POSCO International: large investments and vertical integration
Official fact: In 2019, POSCO International acquired a 75% stake in a grain terminal at Ukraine's Mykolaiv port. The terminal could export 2.5 million tons of grain annually and had exported more than 2.5 million tons in total by 2021.
Interpretation: This strengthened the food-resource business and added earnings stability. Continued operation after the war began is meaningful evidence of crisis response.
| Investment | Core detail | Outcome and read |
|---|---|---|
| Ukraine grain terminal | 75% stake in the Mykolaiv port terminal acquired in 2019 | Annual export capacity of 2.5 million tons, more than 2.5 million tons exported by 2021. Strengthened food resources |
| Australia Senex Energy | 50.1% stake acquired in 2022 for KRW 400 billion | Operating profit doubled from KRW 26 billion in 2021 to KRW 58 billion in 2023. Annual revenue of KRW 600 billion expected by 2026, with operating return around 13% |
| POSCO Energy merger | January 2023 merger completed the LNG value chain | 2023 operating profit reached a record KRW 1.1631 trillion. The stock rose fourfold in 2023, from KRW 20,000 to KRW 90,000 |
POSCO International secured resources around energy and gas, and announced a policy to return 50% of net income to shareholders from 2025. Its 2023 dividend yield was 3~4%, and the payout ratio is planned to rise from 25% to 50%. That is why I see it as the most active not only in investment success rate, but also in shareholder-value linkage.
3. Samsung C&T: the gap between investment results and returns
Official fact: Samsung C&T invested KRW 1.2 trillion in 2022 to increase its Samsung Biologics stake. In 2023, Samsung Biologics operating profit exceeded KRW 2 trillion, and Samsung C&T's stake value rose sharply.
Interpretation: The investment itself was successful, but the connection to shareholder return is weak. Even if asset value rises, the discount can persist if that value does not flow back through dividends or treasury-share cancellation.
- SMR: Samsung C&T invested KRW 85 billion in U.S.-based NuScale Power in 2021, followed by European SMR business expansion in 2023. It is a long-term strategic investment for technology access and has no current earnings.
- Dividend: the dividend rose from KRW 2,000 per share in 2019 to KRW 2,800 in 2023, but the payout ratio was about 19%.
- Dividend yield: lower than peers at 2~2.5%.
- Treasury shares: Samsung C&T holds 13% treasury shares, but active cancellation and return remain insufficient.
- Valuation: despite strong investment outcomes, weak shareholder-value linkage leaves the stock undervalued at about 50~60% of NAV.
4. Comparison across the three companies
| Company | Capital-allocation profile | Shareholder return | My view |
|---|---|---|---|
| POSCO International | Expanded food, gas, and LNG value chains through the grain terminal, Senex Energy, and POSCO Energy merger | 50% net-income return from 2025; payout ratio planned to rise from 25% to 50% | Highest ROI/ROIC and the most active shareholder-return policy |
| LX International | Redeployed capital after property sales into palm oil, coal, nickel, and Hanglas | Dividends of KRW 300 in 2019, KRW 3,000 in 2022, and KRW 2,000 in 2023. Payout ratio 37%, dividend yield 5~8% | Successful business transition and high dividend are strengths |
| Samsung C&T | Samsung Biologics and SMR investments have performance and strategic merit, but capital policy remains conservative | Dividend rose from KRW 2,000 in 2019 to KRW 2,800 in 2023. Payout ratio 19%, dividend yield 2~2.5%, 13% treasury shares held | Investment outcomes are strong, but shareholder-value linkage is insufficient |
5. Follow-up points I will check
The conclusion favors POSCO International, but LX International could be re-rated if nickel and Hanglas cash flow is confirmed. Samsung C&T could narrow its NAV discount if it expands treasury-share cancellation and dividends.
- LX International: whether the expected post-2026 nickel earnings ramp turns into actual cash flow.
- POSCO International: how the 50% net-income shareholder-return policy is executed through dividends and buybacks.
- Samsung C&T: whether asset value is connected to dividends or treasury-share cancellation, and whether the 50~60% of NAV discount narrows.
Sources
- Original Naver Blog post: https://m.blog.naver.com/PostView.naver?blogId=star_of_self&logNo=223754412458