LG Energy Solution Becomes 2nd Most Valuable Firm in South Korea as Stock Climbs 68% in IPO

EV battery maker LG Energy Solution has become the second most valuable firm in South Korea after its IPO debut. The company is benefiting from the rapidly increasing demand for electric vehicles globally. After a record IPO on the 27th of January, LG Energy Solution saw its stock surge 68%, fueling its status among other South African companies. LG Energy Solution saw its stock jump from 300,000 won to 505,000 won as the stock advanced. At the end of the debut day, the EV battery maker’s market valuation was at 118 trillion won, equaling about $98.3 billion on local stock exchanges. 

After the public debut, LG Energy Solution started trading at 597,000 won, representing around 99% above its IPO offering price of 300,000 won. However, it dropped some 25% in early trading before settling at 68.3%. With the achievement, LG Energy Solution is the second-largest EV battery maker after CATL. Chinese CATL recently secured 12.8 trillion ($10.8 billion) won in its initial public offering, valuing the company at $59 billion. 

LG Energy Solution Becomes South Korea’s Second Largest Company in IPO Debut

Just as CATL surpassed LG Energy in its IPO, the Chinese brand also owns a larger share of the global EV battery market. CATL has about 35% market share while LG Energy has 23% of the electric vehicle market. Some of LG Energy’s customers include Tesla (NASDAQ: TSLA), Volkswagen (Xetra: VOW), and General Motors (NYSE: GM). Other brands like Panasonic and BYD also account for around 13% and 7% of the market share, respectively. 

CEO Kwon Young-soo said that a 260 trillion won order backlog shows LG Energy’s possible growth. Also, analyst Kang Dong-Jin at Hyundai Motor Securities said:

“The stock is trading at an expected level considering its discount to CATL. Bigger upside will be seen in the second half of this year and next year as its US factories get closer to being fully operational.”

As expected, LG Energy has plans from the IPO proceeds, which include increasing its production across the global markets. Additionally, the company wants to organize more strategic partnerships with carmakers in China, Europe, and the US This way, it will be able to compete with its rivals across the world. 

Since LG Energy came out of LG Chem in December 2020, the company has grown with over 30,000 employees. Apart from EVs, LG Energy also develops lithium-ion batteries for mobility, drone, IT applications, ships, and energy storage systems. The parent company, LG Chem, will now own 81% of the EV battery maker after its listing.

A lot of companies debuted on South Korea’s main stock board in 2021, generating around 17 trillion won. 

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