Iljin Hysolus shares hit ceiling on first day of trading

South Korea’s only mass-producer of hydrogen tube trailers, Iljin Hysolus Co. made a strong debut on Kospi by reaching the price ceiling on its listing day.

On Sept. 1, the company’s stock price started trading at 68,600 won ($59.20), double its IPO price at 34,300 won ($29.60), before immediately reaching its daily ceiling at 89,100 won ($76.90) and maintaining the price throughout the trading session.

Iljin Hysolus is now valued at 3.2 trillion won (2.8 billion) after its first trading day, almost tripling its market cap prior to the IPO.

The success of its IPO was largely expected by the institutions and retail investors alike. The company started to supply the world’s first commercial hydrogen tank to be used in automobiles as early as 2014, to Hyundai Motor Co.’s Tucson model. Since 2018, Iljin Hysolus has been supplying the tanks to the automaker’s Nexo model as well.

Experts say that Iljin Hysolus can be considered as the world’s only mass-producer of hydrogen tanks. While there are competitors such as Norway’s Hexagon Composites and France’s Plastic Omnium, they are still in the development of early-stage technologies.

According to the Hydrogen Council, a global CEO-led initiative of leading companies with a united long-term vision in expanding the use of hydrogen, the global hydrogen tank market is projected to grow from 3 trillion won ($2.6 billion) in 2025 to about 12 trillion won ($10.4 billion) by 2030.

Market analysts note that the shares of Iljin Hysolus have more room for growth due to the limited supply from institutions, as 77.7% of the volume held by institutional investors is locked up. As a result, only about 14% of the total outstanding shares were traded on the first trading day. 

Some other financial experts, however, highlight that the company’s price-earnings (PE) ratio has now reached a risky level. The ratio currently has a multiple of about 90, much higher than its battery peers with multiples of 40-50.

Even Eugene Investment Co., whose current target price of 90,000 won ($77.66) a share is slightly above the current stock price, said that the company’s reasonable PE ratio based on 2023 earnings projects is 51.

Write to Yun-sang Ko at kys@hankyung.com
Daniel Cho edited this article.