LG Energy Solution announced a record-breaking box office success when it confirmed the public offering price of KRW 300,000 in its initial public offering (IPO). The public offering amount is KRW 12.75 trillion, the largest in the history of the South Korean stock market. The demand forecasting competition rate is also the highest in history with '2023 to 1' with 1988 domestic and foreign organizations participating. The total order size is KRW 1,5203 trillion, and it is the first time that the size of orders in kyung (ten quadrillion) units has been collected.
LG Energy Solution broke both the demand forecasting records of the current record for the largest public offering amount, Samsung Life Insurance (KRW 4.8 trillion) and SKIET (1883 to 1), which were listed on the stock market in 2010. After listing on the 27th of this month, LG Energy Solution's market capitalization is expected to reach KRW 70.2 trillion at once, ranking third in KOSPI market capitalization after Samsung Electronics and SK Hynix.
The main factor for this success is due to relatively low price of LG Energy Solution, and this is why the stock market predicted that LG Energy Solution's market cap would exceed KRW 100 trillion after its listing.
CATL, a listed company and competitor in the global electric vehicle battery market, currently has a market cap of about KRW 247 trillion. While the market share gap between CATL and LG Energy Solution is about 5%, CATL's market cap is more than three times that of LG Energy Solution.
Both companies are expanding overseas battery factories along with securing global automakers. However, while CATL has production competitiveness centered on China, LG Energy Solution has already secured local automakers by announcing plans to build large-scale factories in Europe and the U.S.
Currently, there are only two overseas regions where CATL has confirmed the establishment of future battery factories outside China: Germany (14GWh) and Poland (100GWh or more). On the other hand, LG Energy Solution is currently operating 100GWh plants in the U.S. and Europe. It plans to additionally expand production plants of at least 200GWh by 2025. The possibility that the market share ranking may change in the future cannot be ruled out as the production plant plans are determined by customer demand.
At a press conference earlier this month, Vice Chairman of LG Energy Solution, Young-soo Kwon said, “In accordance with the Chinese policy of requiring the use of domestic batteries, CATL has increased its sales without difficulty. Profitability was high due to low labor cost and 100% Chinese material procurement. It will not be easy for CATL to secure customers in the U.S. and Europe.”
By Staff Reporter Tae-jun Park (gaius@etnews.com)