S.Korea's LS Materials set to boost earnings ahead of IPO process

LS Materials Co., a South Korean energy storage devices maker, is slated to ramp up earnings to accelerate its initial public offering process this year.  

The subsidiary of cable producer LS Cable & System Ltd. aims for 186.1 billion won ($143.4 million) in revenue and 18.1 billion won in operating profit for 2023, respectively, up 15% and 36% from the last year, according to sources on March 6.

The company will boost earnings with ultracapacitors, high-capacity electrochemical devices for energy storage now seeing demand in the renewables market.

LS Materials has been manufacturing ultracapacitors for 20 years, serving the global transportation, renewables and automation sectors. It is increasing production of the energy storage devices for wind power, while operating plants in Anyang and Gunpo, Gyeonggi Province in Korea.

The company’s operating profit reached 13.3 billion won last year, up 60.2% on-year with surging overseas sales as the US implemented the Inflation Reduction Act spurs the financing and deployment of clean energy. 

The company is also running high strength aluminum alloy business via its unit LS Alsco Co., which has supplied aluminum parts to Hyundai Motor Co. and Kia Corp. since 2019 and is developing aluminum alloy for EVs. The aluminum subsidiary posted 120.7 billion won in revenue and 8.8 billion won in operating profit last year, respectively, up 32% and 29% on-year.

For future growth, LS Materials is developing energy storage systems for electric vehicles. The company, alongside parent LS Cable & System, started a Korean government-backed project to develop hybrid energy storage systems to charge EVs last November.

LS Materials is aiming to go public between the end of 2023 and the first half of 2024. The company sent requests for proposal to local brokerage firms last month to kick off the listing process. 

The company was split off from heavy machinery manufacturer LS Mtron Co. in 2021. LS Cable & System holds 50% ownership, followed by local financial investor KStone Partners.

Write to Sungsu Bae at baebae@hankyung.com

Jihyun Kim edited this article.