LS Materials embarks on IPO process to go public in 2023

Global top ultracapacitor player LS Materials Co. is expected to go public in South Korea this year, which would mark the first LS Group company IPO in seven years.

According to the Korea Exchange (KRX) on Tuesday, the Korean energy storage device maker filed a preliminary review for its listing on the Kosdaq, Korea’s junior bourse.

Considering that a review normally takes about 45 working days, the Korean supercapacitor manufacturer is expected to be listed within this year if the KRX gives it the nod.

When its financial investor Keistone Partners Co. sold some of its shares in the company last month, LS Materials was valued at about 300 billion won ($237.8 million). Given this, the company is forecast to raise funds at an estimated valuation of up to 500 billion won during its public share sale.   

It will sell about 14,630,000 shares, including both new and existing shares at a 60%-40% ratio. KB Securities Co. and Kiwoom Securities Corp. are co-underwriters.

Its biggest shareholder with a 50% stake is LS Cable & System Ltd. (LS C&S). The remaining shares are held by multiple financial investors including Keistone Partners.

If it goes public as planned, it would be the first IPO for an LS Group company since the listing of LS Cable & System Asia Ltd. in 2016.

LS Materials' IPO would give its parent LS Group a chance to test the waters of its new vision of doubling its assets to 50 trillion won by 2030 with carbon-free electricity, which refers to electrical energy produced from resources that do not generate carbon emissions.

Under this Vision 2030, batteries, electric vehicles and semiconductors are the group’s new growth drivers and LS Materials is responsible for one of the three pillar businesses.

WORLD’S NO.1 ULTRACAPACITOR FIRM EYES EV COMPONENTS 

LS Materials was set up in 2021 after its ultracapacitor business was spun off from LS Mtron Co., a heavy machinery and electronic components maker.

It is the global leader in large-model supercapacitors, which are regarded as next-generation rechargeable batteries.

Ultracapacitors are energy storage systems positioned between conventional electrolytic capacitors and rechargeable batteries.

They boast faster charging and discharging speeds and longer life than lithium-ion batteries. They are mainly used in wind power turbines, uninterrupted power supply at semiconductor plants, factory automation and automated guided vehicles.

The company plans to build its own EV components value chain by venturing into the EV aluminum materials and components business.

Its wholly owned LS Alsco Co., which runs a high-strength aluminum alloy business, supplies refined aluminum for use in EV batteries. It has been supplying aluminum parts to Hyundai Motor Co. and Kia Corp. since 2019.

In February, LS Materials also agreed to set up a joint venture in Korea, called LS-HAI JV, with Australian aluminum expert Hammerer Aluminium Industries (HAI) which will start producing high-strength aluminum products for EV components in 2025.

The company's earnings have improved every year thanks to growing demand for its ultracapacitors and an expanding aluminum business.

Its consolidated operating profit for 2022 stood at 14.5 billion won on sales of 162 billion won, up 471% and 280% on-year, respectively.

LS Materials plans to use the proceeds from the upcoming IPO for facility expansion, R&D and making inroads into overseas markets, the company said.

Write to Seok-Cheol Choi at ihs@hankyung.com
Sookyung Seo edited this article.