BGF Retail Co., operator of Korea’s largest convenience store chain, CU, is expected to see its share price recover on eased concerns over its financial support for ailing affiliates, according to a report released by SK Securities Co.

According to the reports on Thursday, BGF Chairman Hong Seok-joh disposed his 23.75 percent stake in Bokwang Group, headed by his younger brother Hong Seok-gyu. Bokwang Group is a Korean conglomerate that engages in leisure, culture, communications and semiconductor businesses, fully owned by five owner family members including Seok-joh and Seok-gyu. Older Hong’s latest divestiture of his stake in Bokwang Group has allowed him to distance himself from the group currently grappling with financial scourges with its semiconductor units STS-semiconductor Co. and Corelogic Co. that have been struggling with liquidity crunch since 2012.

Back in February, BGF Retail bought Bokwang Icheon, golf course of Bokwang Group, at around 130 billion won ($111.3 million) from the group to help the group saddled with immense debt. Investors and securities firms disheartened by the news walked away from BGF Retail shares despite BGF Retail’s solid earnings improvement since 2014. BGF Retail is expected to see its operating profit to reach about 200 billion won this year, up from 183.6 billion won in 2015 and 124.1 billion won in 2014. Its local peers, on the other hand, will likely report earnings that would be either similar to or worse than their previous year’s results.

BGF Retail’s sell-off of its stakes in Bokwang Group has eased concerns over additional financial support for its ailing affiliate, helping investors regain confidence in the company, said Son Yoon-kyung, an analyst at SK Securities.

Shares of BGF Retail closed at 87,400 won, down 3 percent, or 2,700 won, on Friday from the previous session.

By Lee Yong-gun and Yoon Jin-ho

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