LS Materials to tap deeper into EV, green energy markets
LS Materials, a South Korean energy storage device manufacturer, said on Tuesday the firm will further solidify its presence in sustainable energy and technology markets with the fund it would raise from its upcoming initial public offering slated for next month.
As the company prepares to list on the secondary Kosdaq market, it's positioning itself as a pivotal player in emerging green industries, including ultra capacitors and electric vehicles.
"We're seeking a third location for a new plant, aiming to more than double our production capacity within the next couple of years, as our existing factories in Anyang and Gunpo are at full capacity," said LS Materials CEO Hong Young-ho. This expansion is in response to a backlog of ultra-capacitor orders and involves investing over 20 billion won in facility expansion.
The IPO aims to offer 14.65 million shares priced between 4,400 won ($3.40) to 5,500 won each, potentially raising between 64.3 billion to 80.4 billion won. The capital raised will primarily fund the development of an integrated production facility for ultra capacitors and investment in cutting-edge technologies like lithium-ion capacitors.
LS Materials hired KB Securities and Kiwoom Securities for managing the IPO, with additional support from eBEST Investment & Securities, Hi Invest & Securities, and NH Investment & Securities as underwriters.
Institutional investors have been invited to participate in setting the offering price through demand forecasting, while the general public can subscribe on Dec. 1 and 4. The company is expected to go public on Dec. 12.
In 2022, LS Materials demonstrated robust financial growth, with sales surging to 161.9 billion won and operating profits reaching 14.4 billion won. These figures increased by 280 percent and 470 percent over the previous year, respectively.
Founded in 2021, LS Materials evolved from the spin-off of LS Mtron's ultra capacitor business. The company specializes in manufacturing ultracapacitors -- energy storage devices known for their high power density and long cycle life. LS Materials' focus on medium and large-sized ultra capacitors, a niche segment globally, provides it with a competitive advantage.
Hong also highlighted the company's growing global influence, especially in North America and Europe, where overseas sales jumped from 29 percent in 2019 to 85 percent in 2022.
Further diversifying its portfolio, LS Materials is venturing into the development of lithium-ion capacitors, a hybrid of lithium-ion batteries and ultracapacitors, designed for ultra-fast charging infrastructure for EVs.
LS Materials, through its subsidiary LS Alsco, also engages in the design and manufacture of aluminum structures and components for various industries. A notable achievement is the development of the high-strength aluminum material AA8031, certified by the Aluminum Association.
A significant stride in the aluminum sector is its partnership with Austria's Hammerer Aluminum Industries, or HAI, to form the joint venture HAIMK. The joint venture aims to supply specialized aluminum components for EVs, merging LS Materials' manufacturing capabilities with HAI's advanced extrusion technology.
Environmental sustainability, however, remains a challenge. While HAI incorporates an average of 80 percent recycled material in their products, the near-perfect purity required for aluminum electric conductors in EVs presents recycling challenges for LS Alsco. This purity is essential to maintain optimal electrical conductivity.
HAIMK has also devised a strategy in response to the European Union's Carbon Border Adjustment Mechanism regulation.
"HAIMK is making a strategic maneuver by tapping into HAI's European production lines. This approach not only circumvents potential border tax challenges, but also positions the joint venture for autonomous international expansion, while ensuring a steadfast supply to the Korean market," Hong said.