Korea’s battery recycling company SebitChem seeks IPO

SebitChem Co., South Korea’s secondary battery recycling company, is seeking an initial public offering, taking advantage of investors’ sustained demand in the sector despite souring sentiment on rising interest rates amid concerns over a global recession.

SebitChem aims to raise up to 32.1 billion won ($24.2 million) with an estimated market capitalization of as much as 147.2 billion won through a listing on the country’s junior bourse Kosdaq next month, according to investment banking industry sources on Thursday. The company plans a two-day bookbuilding process on July 20-21 to set an IPO price, and a public subscription on July 26-27.

The company, formerly known as Dongyang Chemistry established in 1993, initially focused on recycling liquid wastes stemming from the semiconductors and display production processes and started the secondary battery recycling business in 2016.

Its battery recycling business is quickly growing, making up 68% of its total sales last year, more than double 32% in 2019. The sector is leading the improvement in the company’s overall profitability.

SebitChem’s operating profit more than doubled to 5.5 billion won in 2021 with sales up 59% to 33.4 billion won. It reported an operating profit of 2.8 billion won in the first quarter, more than half of the profit for the whole of last year.

SUCCESS OF ANOTHER BATTERY RECYCLING COMPANY

Its listing plan came after another local battery recycling company SungEel Hitech Co. drew strong demand from institutional investors for its IPO earlier this week with a bookbuilding 2,269.7 times oversubscribed.

“It is hard to directly compare SungEel and SebitChem in production capacity, business power and reference,” said an IB industry source. “But SungEel’s success will be encouraging for SebitChem as it indicated growing interest in the secondary battery industry. SebitChem’s IPO size is also relatively small.”

After SebitChem’s planned IPO, W-Scope Chungju Plant Co. (WCP) is poised for a listing with an expected market capitalization of up to 3.4 trillion won in early August.

The wholly-owned subsidiary of Japan’s W-Scope Corp. develops and produces separators, key materials of electric vehicle batteries along with anode materials, cathode materials and electrolytes.

WCP’s IPO is expected to draw strong interest among investors after successful listings of the country’s major players in the sector such as LG Energy Solution LTD. and SK IE Technology Co., sources said.

Write to Seok-Cheol Choi at dolsoi@hankyung.com
Jongwoo Cheon edited this article.