LS Materials prepares for $62 million IPO

Industry

Published: 28 Nov. 2023, 16:52

LS Materials prepares for $62 million IPO

From left, Lee Hee-young, head of LS Materials' ultracapacitor division, LS Materials CEO Hong Young-ho and LS Materials Chief Financial Officer Yoo Chang-woo answer questions at the press event ahead of the firm's initial public offering in Yeouido, western Seoul on Tuesday. [LEE JAE-LIM]

LS Materials, an energy storage devices maker under LS Group, is set to be listed on the Kosdaq on Dec. 12 with the goal of raising as much as 80.4 billion won ($62.2 million) amid growing global demand for electric vehicles and secondary batteries.

The company plans to issue 8.775 million new shares and 5.85 million old shares priced at 4,400 won to 5,500 won, in order to raise between 644.4 billion won to 80.4 billion won.

That will give the firm a total market value of 297.7 billion won to 372.1 billion won.

LS Materials split off from LS Mtron’s ultracapacitor division in 2021. An ultracapacitor, otherwise known as a supercapacitor, is a next-generation energy storage device that can store and release electrical energy faster than a battery does.

Its largest shareholder is LS Cable & System, which owns 50 percent of the company.

“LS Materials is LS Group’s producer of core materials that will lead the era of sustainable and electric energy,” said LS Materials CEO Hong Young-ho at a press event held in Yeouido, western Seoul, on Tuesday, to explain the company’s advantages and future plans if its initial public offering (IPO) succeeds.

“LS Materials will play a critical role within the net-zero value chain and become a comprehensive provider of materials in electric cars, secondary batteries, robots, wind energy and energy storage devices.”

Hong is confident that the company can build a strong market foothold overseas — especially in North America and Europe — for its ultracapacitor business, where its clients receive more pressure to reach net-zero goals.

“Seventy percent of the 41.3 billion won in revenue LS Materials generated from sustainable energy last year derived from the North America and European regions,” Hong said. “Overall, 85 percent of total revenue came from overseas.”

Global ultracapacitor market size is expected to grow 269.6 percent to $8.5 billion in 2026 from 2020’s $2.3 billion, according to global market data firm Stratview Research.

Hong contends that LS Materials is set to become a global market leader in the ultracapacitor business.

“There is only one sole Chinese company that LS Materials view as a competitor in large-scale ultracapacitor business,” Hong said. “The market competition is not severe, and LS Materials is in the process of developing a next-generation product that would propel the company further.”

LS Materials is developing a lithium-ion capacitor, which the company says will fuse the advantages of lithium-ion batteries with those of ultracapacitors. The upcoming product aims to have both the high energy density that characterizes lithium-ion batteries and long battery span deriving from the ultracapacitor.

LS Materials is scheduled to begin its production by the fourth quarter of 2025.

Its aluminum production business, which is overseen by LS Materials’ wholly-owned LS Alsco, is also a cash-cow business for the company. Its revenue constituted 74 percent of the total 100.6 billion won that LS Materials brought in during the first nine months of this year.

KB Securities and Kiwoom Securities are managing the IPO.

LS Materials logged an operating profit of 10.7 billion won for January-September period and revenue of 100.6 billion won during the same span.

In 2022, its annual operating profit skyrocketed 470 percent on year to 14.4 billion won. Revenue rose 280 percent to 161.9 billion won.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]