Enchem to expand capacity in China and Hungary through IPO proceeds

Enchem CEO Oh Jung-kang

South Korea’s battery electrolyte producer Enchem plans to expand production lines in China and Hungary from its initial public offering on the Kosdaq.

The company which serves battery majors at home and abroad will offer 2.26 million initial shares in the band of 30,000 won to 35,000 won ($29.31), 15 percent of 15 million shares to be listed by end of October or early November.

“After the market debut, Enchem will make a leap towards a global top-tier in the battery electrolyte industry. We’ll be prepared for the future faster than the industry rivals to lead the secondary battery market,” said Oh Jung-kang, CEO of Enchem during his interview with Maeil Business Newspaper on Tuesday.

When priced at the top end of 35,000 won, the new battery material stock will command a market cap of 529.1 billion won. Enchem plans to use the proceeds to expand its manufacturing lines in China and Hungary, Oh added.

Book building for pricing is due on Oct. 15-18 and retail investors will be invited to subscribe the new shares on Oct. 21-22. Daishin Securities and Shinhan Investment are underwriters for the IPO.

Enchem specializes in development and manufacturing of electrolytes and high functionality additives for rechargeable batteries. Electrolytes decide the thermal stability and performance of batteries and thus, it is important to keep it stable and supply fast to clients.

Enchem with manufacturing lines in Korea, Europe, the U.S. and China is capable of supplying its products faster than others and has become the only supplier to all of the world’s top three battery makers – Korea’s LG Energy Solution and SK Innovation and China’s CATL.

Last year, the company earned 98.3 billion won in revenue, of which 71 percent came from exports.

Earnings outlook is much brighter. Global battery electrolyte market is estimated to grow fast at an annual rate of 21.2 percent to 2025 from 2018, according to market research firm SNE Research.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]