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SoluM, LG Chem’s battery split-off eye IPOs

SoluM CEO Jun Sung-ho speaks at a press briefing in Seoul on Wednesday. (SoluM)
SoluM CEO Jun Sung-ho speaks at a press briefing in Seoul on Wednesday. (SoluM)
Amid continuous stock markets rallies and investors’ growing interest in initial public offerings, SoluM, a spin-off from Samsung Electro-Mechanics, and LG Energy Solution, a battery split-off from LG Chem, are eyeing market debuts.

Electronic components maker SoluM is looking to raise as much as 99.2 billion won ($90.60 million) from its IPO early next month, becoming the first firm to be listed on the nation’s benchmark Kospi this year, its chief executive officer said Wednesday in a press conference.

“Since our new businesses have been growing in earnest, we thought now is the best time for listing,” the company’s CEO Jun Sung-ho said. “The funds raised through the public offering will be used for our operation’s sustainable growth.”

SoluM is offering 6.4 million new common shares in the price range of 13,700-15,500 won. The exact share price will be determined on Jan. 20 after the book building process for institutions. Retail investors’ public subscriptions will be accepted Jan. 21-22, with Mirae Asset Daewoo and KB Securities as the main underwriters.

The company was founded in September 2015 by separating from Samsung Electro-Mechanics. With its strength in research and development of electronic components, the firm has provided power modules, television’s 3-in-1 boards and electronic shelf label services to its clients such as China’s largest e-commerce platform Alibaba and US chipmaker Intel.

With its leading business in the global electronic shelf label market, the growth rate of the firm’s annual average sales came to 29 percent, the chief said. Despite the COVID-19-hit economy, its sales and operating profit marked 812 billion won and 45.77 billion won, respectively, from the first to the third quarter last year. Its net income came to nearly 33.96 trillion won over the cited period, he added.

LG Energy Solution logo (LG Energy Solution)
LG Energy Solution logo (LG Energy Solution)

Battery maker LG Energy Solution, which split off from LG Chem last month, has also kicked off its IPO process by recently sending requests for proposals to brokerage firms ahead of selecting underwriters for the deal, according to industry sources.

The sources forecast that the battery maker is highly likely to be eyeing its market debut on the nation’s main bourse as early as in the second half of this year. Previously, there were rumors about the company preparing for a listing on either the US tech-heavy Nasdaq or Kospi market within two or three years.

So far, LG Energy Solution has denied further comment on its listing plan, aside from mentioning the official announcement will be made through DART -- the Financial Supervisory Service’s electronic disclosure board -- when details on the matter are confirmed.

Market watchers have painted a rosy outlook for the company’s earlier-than-expected IPO, while estimating the company value at between 50 trillion won and 100 trillion won. Amid the rapidly growing electric vehicle market, a massive amount of funds raised via public offering is necessary for the firm to be a leading battery maker.

“The main purpose of the secondary battery business spinoff was to secure finances, so there’s no reason for LG Energy Solution to delay fundraising. It’ll be a great opportunity for the firm to get its business’ revaluation and expansion via IPO,” said Hwang Yoo-sik, an analyst at NH Investment & Securities.

By Jie Ye-eun (