LG Energy Solution becomes the 2nd largest company in Korea in its share premiere

By Heekyong Yang and Jihoon Lee

SEOUL (Reuters) -LG Energy Solution Ltd (LGES) rose its share price by 68% on Thursday at the start of its trading call, following an IPO record, bringing the electric vehicle (EV) battery maker to the level of South Korea’s second-largest company. .

The compelling debut sets a stage for analysts to expect another unique year for Korea’s initial public offerings (IPOs) due to a lack of mega-offerings in other parts of Asia as more institutional investors look to the country.

But it was a worldwide trend toward electrification of transportation that prompted nearly 2,000 potential foreign and domestic institutional investors to bid $ 12.8 trillion on the LGES IPO to raise shares in a company that boasts one-fifth of EV batteries. on the market and with a list of heavyweights such as General Motors Co. (NYSE :), Volkswagen AG (OTC 🙂 and Tesla (NASDAQ 🙂 Inc.

LGES shares started trading at 597,000 won, almost double the price of 300,000 won set in South Korea’s largest ever IPO.

It closed at 505,000 won, more than 68% of the IPO price, but 15% lower than Thursday’s open, down 3.5% in the market. However, that left LGES, separated from LG Chem Ltd, second behind Samsung Electronics (OTC 🙂 Co Ltd, in terms of market value of 118 trillion won ($ 98.08 billion).

The debut performance was the best benchmark since Kakao Pay Corp., a financial services company, gained 114% in November compared to its IPO price, and has been on Seoul’s charts for the past year.

The market value of LGES is still less than $ 208 billion for its Chinese rival Contemporary Amperex Technology Co Ltd (CATL). In addition, analysts have noted the growing competition from Chinese members around the world, as well as the opportunity for automakers to develop their own battery technology.

However, CEO Kwon Young-soo said the $ 260 trillion earnings demand highlights LGES ’growth potential.

“The stock is trading at the expected level of discounting the CATL. The second half of this year and next year will see a bigger rise as its US factories approach their full operation,” said Hyundai analyst Kang Dong-jin. Motor Values.

‘ANT’ INVESTORS

More than 20 companies were traded on the South Korean stock chart last year, garnering about 17 trillion won, almost double the previous record of 8.8 trillion in 2010, according to data from the Korea Exchange stock exchange operator.

Analysts expect to list even more companies this year in South Korea, including startups like SOCAR mobility platform company and Kurly Inc online food services company.

Boosting hopes for the list is a flood of liquidity brought in by retail investors, known as ants, taking advantage of the government’s policy of reviving the economic pandemic.

More than $ 4.4 billion in retail investors offered a record $ 95 billion in subscriptions https://www.reuters.com/markets/europe/skoreas-lg-energys-108-bln-ipo-draws-record-demand-retail- investors-2022- 01-19 LGES shares, the largest fund-raising fund in Asia since China. Alibaba (NYSE 🙂 Group Holding Ltd raised $ 12.9 billion in its second Hong Kong 2019 listing.

($ 1 = $ 1,203,1100)