Hyundai Engineering to heighten renewable identity as its readies IPO this month

Seo Chan-dong and Lee Eun-joo 2022. 1. 17. 13:33
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[Source: Hyundai Engineering Co.]
Hyundai Engineering Co., the plant engineering unit of South Korea¡¯s Hyundai Motor Group readying maximum $1 billion IPO later this month, vows to strengthen renewable and green energy business to contribute 10 percent in sales by 2025.

Hyundai Engineering on Monday set new business goal to make it public on Jan. 25, the first day it invites book-building on its initial shares in price guidance of 57,900 won to 75,700 won for listing in February. At the top end of offering in 16 million shares – of which 75 percent would come from owner family stakes – the builder will raise from 926.4 billion won to 1.2 trillion won ($1 billion). Upon listing, it would command market cap from 4.6 trillion won to 6.5 trillion won to become the largest in the construction category on the Kospi.

It will build up green identity to add appeal to the new stock.

The company will explain strategy on blue hydrogen new business, said an unnamed official from Hyundai Engineering.

The builder currently owes 89 percent of revenue to plant and construction sector - 45.5 percent in plant and infrastructure and 43.5 percent in construction and housing. Asset management and other businesses account for the remaining 11 percent.

Hyundai Engineering is seeking to maximize role as environment and energy unit of Hyundai Motor Group by raising share of environment and energy business versus sales to 10 percent. The projects will include hydrogen production, waste plastic and carbon dioxide resource recovery, waste material incineration and disposal, and small nuclear reactors.

Han Dae-hee, executive director of green environment and energy (G2E) business at Hyundai Engineering, said that the company plans to raise 10 percent of total revenue from new businesses by 2025. It expects profit margin of new businesses to reach 20 percent.

Hyundai Engineering has been expanding investment and research development in clean hydrogen production technology sector and reducing carbon emission to carve out a new image as environment and energy company.

In December, Hyundai Engineering joined hands with GT and built a facility dedicated to carbon capturing and resource recovery at a site near Hyundai Steel¡¯s Incheon factory. The facility, which is the first of its kind of the world, receives carbon dioxide from Hyundai Steel¡¯s factory and through GT¡¯s metal-CO2 system significantly reduces carbon dioxide and produces hydrogen, electricity, and carbonates.

Last year, Hyundai Engineering also completed demonstration test of its technology that produces high-purity clean hydrogen using waste plastic as raw material. The company aims to begin commercial production in 2024 after launching construction of the hydrogen production plant this year.

In January, Hyundai Engineering announced plans to commercialize ammonia decomposition hydrogen production system that uses next-generation environmentally-friendly material ammonia for production.

Han said that the company is hoping to contribute to reaching carbon neutral goal by carrying out investment and preemptive R&D on blue hydrogen production technology. The company will become a global environment and energy company by expanding green energy projects not only in blue hydrogen production sector but also solar power and micro modular reactor.

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