Companies in the South Korean battery industry are looking to commence initial public offerings (IPO) on KOSDAQ from the South Korean government's move towards boosting the electric vehicles market to jump start the economy that has been damaged by the COVID-19 pandemic.
A total of six companies have announced their plans for an IPO: SK IE Technology, a subsidiary of SK Innovation, as well as LS EV Korea, TSI, A-Pro, Yoonsung F&C and Enchem.
This is already more than the five companies (Chunbo, EcoPro BM, ITM Semiconductor, Cowin Tech) that proceeded with IPO in total last year in the battery industry.
Even more companies, especially those in batter equipment, may join the list later this year.
SK IE Technology’s is expected to be the biggest event among the six. The company has its parent company SK Innovation as a guaranteed client of lithium-ion battery separators (LiBS). The company is expanding its factories in Changzhou, China and Slaskie, Poland. SK IE Technology will have an annual production rate of 1.21 billion meter-square in separators once these expansions are complete.
LS EV Korea is a subsidiary of LG Cable & System. The company is supplying wiring harness, batter pack components and components for ESS to companies such as Volkswagen, Volvo and LG Chem. The company initially aimed to go public in March but this has been delayed to the second half of the year due the virus outbreak.
TSI, A-Pro and Yoonsung F&C are battery equipment makers. TSI and Yoonsung makes mixing equipment that is used to mix various chemicals into a slurry used in batteries. TSI is moving from KONEX to KOSDAQ.
A-Pro makes battery formation equipment. It specializes in pouch-type batteries and LG Chem is its biggest client. It is seeing posting solid performances in recent months alongside competitor PNE Solution from demand in the electric vehicle market.
Enchem makes electrolytes and competes with Chunbo, Soulbrain and Dongwha. LG Chem and SK Innovation are its major clients and it is building a factory in Georgia in the US, its third overseas operations after those in China and Poland.
Investors, however, will have to keep and keen eye on which of these companies have actual growth potential, people familiar with the matter said. Separator market is facing oversupply from China. Some of these companies rely to heavily on one client. TSI is in the middle of a lawsuit with a rival, which forced the company CEO write a letter to the Korea Exchange promising that it won’t affect the company. Enchem is in the middle of a dispute with its second-largest shareholder Chunbo over management rights.