Cheil Industries Inc., the de-facto holding firm of Samsung Group, is set to make a market debut on Thursday, giving a huge boon for the group's owner family as the country's top conglomerate accelerates rearrangement of its ownership structure to smooth out an apparent managerial succession in progress, analysts said Wednesday.
   
The company, formerly known as Samsung Everland whose trademark business was zoo and amusement park operations, stands at the apex of the group's cobweb-like cross-shareholding structure. It holds a 20 percent stake in key financial unit Samsung Life Insurance Co., which in turn is a major shareholder in the group's flagship affiliate Samsung Electronics Co.
   
Cheil Industries' business portfolio ranges from food services and a theme park to fashion and construction. Last year, Cheil Industries posted a net profit of 96.3 billion won on sales of 3.02 trillion won.
  
Last week, Cheil Industries said it expects to raise some 1.5 trillion won (US$1.35 billion) through an initial public offering (IPO) by selling its stocks at 53,000 won per share, the highest price in its IPO range. The listing was initially scheduled for early next year.
  
The IPO, the country's largest in four years, is the second of its type by Samsung this year after one of the group's IT units, Samsung SDS Co., made its market debut last month.
   
Cheil Industries share is expected to jump on its first trading day as investors bet the firm will assume a solid position in the group's ownership structure. Also, its assets would be revalued, and it would add new businesses to its portfolio, analysts said.
   
The median target price for Cheil Industries offered by eight brokerage houses was put at 95,400 won, with some suggesting over 125,000 won.
   
"Cheil's key businesses are not affected by economic cycle, and it is expanding into overseas markets," said Han Byung-hwa, an analyst at Eugene Investment & Securities. "Its bio business, which is a future growth engine, would make Cheil Industries more attractive."
   
Already, record-high subscriptions for Cheil Industries during a two-day pre-order session last week proved investors' interests.
   
Investors had submitted 30.06 trillion won, surpassing the previous 19.84 trillion won for Samsung Life Insurance Co. in 2010.

The latest subscription easily passed that of Samsung SDS Co., another Samsung affiliate, which drew in 15.55 trillion won in November.
  

The conglomerate has been seeking to transform its business portfolio and go public with some of its affiliates after the group's owner, Lee Kun-hee, was hospitalized in May after a heart attack, in an apparent move to help the group's management
succession.  
  

Earlier this month, Samsung Group said it will sell four chemical and defense units to Hanwha Group in a deal estimated at 1.9 trillion won as it continues its business reorganization for an eventual management transfer to the next generation of family.
   
Samsung is now at a crossroads, hit by a marked fall in profit in its IT business, and is eager to sort out the businesses that aren't productive so that it can focus more on those that are profitable and promising.
   
The group's owner Lee holds a 3.7-percent stake in Cheil Industries, and his only son and heir apparent Jay-yong has the largest portion of 25.1 percent. The elder Lee's two daughters each own 8.4 percent. The owner family members hold a combined 45.8 percent in Cheil Industries.
   
The earnings from the upcoming IPO are expected help the three younger Lees cover the inheritance taxes and other costs necessary for them to expand their control over the family business.
  
"The earlier-than-expected listing of Cheil Industries is laying the groundwork for setting up the group's holding firm," said Kim Young-woo, an analyst at HMC Investment & Securities.

"Cheil Industries will boost dividend payouts and reap other loyalty income if it emerges as a holding firm." (Yonhap)