LG Energy Solution likely price initial shares this week at top end in $11 bn IPO

Pulse 2022. 1. 10. 14:12
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[Source: LG Energy Solution]
LG Energy Solution, the pure-play electric vehicle battery maker of South Korea’s LG Group, is pricing Korea’s biggest IPO of a $10 billion milestone this week.

LG Energy Solution, the battery business spun off from LG Chem, holds book-building session for institutional investors Tuesday and Wednesday. Pricing will be announced on Friday and invite public subscription on Jan. 18-19 before Kospi debut on Jan. 27.

LG Energy Solution will offer 42.5 million initial shares at an indicative price band of between 257,000 won and 300,000 won. Most analysts predict the IPO to be priced at the top end to raise 12.7 trillion won ($10.6 billion). The stock would zoom to No. 3 after chip bellwethers with market cap at 70 trillion won.

Its IPO underwriters bet the company’s value to enlarge to 100 to 112 trillion won.

LG Chem, who wholly owns LG Energy Solution, extended losses on the stock market. Shares were 1.95 percent lower at 705,000 won as of 2:07 p.m. Monday.

Yoon Hyuk-jin, researcher at SK Securities, expects more room for growth in LG Energy Solution stock after its IPO after considering that LG Energy Solution’s Enterprise Value (EV)/Earnings before Interest, Tax, Depreciation, and Amortization (EBITDA) is 43 times based on a maker value of 100 trillion won versus its peer and Chinese battery manufacturer CATL’s is 80 times as of last year.

All the latest blockbuster debutants SK Bioscience, SK IE Technology, KakaoBank, Hyundai Heavy Industries, and Kakao Pay saw their stock prices go up upon listing.

Despite the country’s current stricter loan regulations, LG Energy Solution is expected to draw more than 30 trillion won in subscription deposits given that KakaoBank IPO attracted 58.3 trillion won last year.

The IPO market that has stagnated amid rising interest rate environment will likely gain vitality through LG Energy Solution’s splash.

Moving up to the mound next is Hyundai Engineering whose book-building session will take place on Jan. 25 and 26 before public subscription on Feb. 3 and 4. Other candidates in IPO pipeline are Hyundai Oilbank, SSG.com, Kurly, One store, SK Shieldus, and CJ OliveYoung.

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