Energy storage devices firm LS Materials launches IPO process

South Korea’s energy storage devices maker LS Materials Co. began the process for an initial public offering later this year as it aims to develop electric vehicle-related businesses amid the rapid growth in the global eco-friendly automobile industry.

LS Materials picked up KB Securities Co. and Kiwoom Securities Co. as lead managers for a listing on the country’s junior Kosdaq, its parent company LS Cable & System Ltd. said on Monday. The subsidiary is set to apply for a preliminary review by June.

“LS Materials will be the first listed subsidiary in the renewable energy and electric vehicle sectors, leading LS Cable’s related businesses,” said LS cable in a statement. “We will intensively invest in and foster the new growth engines.”

LS Material’s corporate value was estimated at some 420 billion won ($319.4 million), given local competitor Sama Aluminium Co.'s price-to-earnings ratio of about 50 times.

“Investors are significantly interested in secondary battery materials makers,” said an investment banking industry source in Seoul. “Its enterprise value could top 500 billion won, depending on demand.”

The company’s operating profit soared by 73% to 14.5 billion won last year with sales up 28% to 162 billion won. Its net profit nearly quadrupled to 8.4 billion won.

ULTRACAPACITORS, ALUMINUM

LS Materials is the global leader in large models of ultracapacitors, which are regarded as next-generation secondary batteries.

Ultracapacitors, which have the advantage of fast charging and discharging, as well as long life, often replace and supplement primary batteries and lithium-ion batteries. They are mainly used for wind power turbines, uninterrupted power supplies at semiconductor plants, factory automation and automated guided vehicles.

The company is already running a 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.

LS Cable is also expanding its business of aluminum for EVs. The company last month agreed to establish a joint venture with Austria’s Hammerer Aluminium Industries GmbH (HAI), the world’s No. 1 producer of aluminum parts for EVs. They will spend 67.5 billion won on the mass production of high-strength and lightweight aluminum parts for EVs from 2025.

“Ultracapacitors are predicted to rapidly grow as they can make up for shortcomings of the existing secondary batteries, while demand for aluminum, especially in the EV sector, is surging,” said LS Materials CEO Hong Yeong-Ho.

Write to Ik-Hwan Kim at lovepen@hankyung.com
 
Jongwoo Cheon edited this article.