LG Ensol listing D-1… Frozen two-seam as a new variable

The listing of LG Energy Solutions (LG Ensol), which is considered the biggest word in this year’s IPO, is approaching a day away. It is raising expectations for the so-called ‘dasang’ (the upper limit after the opening price is doubled) by collecting record-breaking margins and recording success in both demand forecasting and public offering. However, as investor sentiment is frozen on the move to tighten austerity measures by the US Federal Reserve, it is expected to become a new variable.

According to the Korea Exchange on the 26th, LG Ensol will start trading on the stock market with the opening of the stock market on the 27th.

The offering price is 30,000 won. The opening price is determined as the price at which the ask price and the bid price coincide with the asking price, which is received between 90 and 200% of the public offering price between 8:30 and 9 am on the listing date. Based on this opening price, a price limit of 30% up and down during the day is applied.

Excluding major shareholder holdings, allocation to employee stock ownership association, and institutional commitments, LG Ensol’s volume available for distribution immediately after listing is 8.85%. This is much lower than last year’s large-cap IPOs, such as Kakao Bank (22.6%), SKIET (15.04%), and SK Bioscience (11.63%). If the amount available for circulation on the listing date is small, it is advantageous to the stock price as there are not many items for sale on the market.

If LG Ensol’s starting price is set at 600,000 won, which is twice the IPO price, and it succeeds in ‘tasang’ to the upper limit, the stock price on the listing date can rise to a maximum of 780,000 won. If it achieves the Dasang Award, you can earn a profit of 480,000 won per share on the listing date.

LG Ensol’s market cap is 70.2 trillion won based on the IPO price. Even if the public offering is listed as it is, it will rank third in the KOSPI market capitalization after Samsung Electronics (455.5 trillion won) and SK Hynix (92.5 trillion won).

If LG Ensol succeeds in winning the prize, the market cap will reach 182.52 trillion won. If LG Ensol succeeds in winning the prize, LG Group could surpass SK Group (194.8 trillion won) with a market capitalization of 131.4 trillion won and become the second largest group after Samsung Group (705.1 trillion won).

However, the results of the first annual Federal Open Market Committee (FOMC) meeting of the US Federal Reserve, which will be held for two days starting from today, could act as a variable. Financial markets at home and abroad are fluctuating day after day on concerns that the pace of monetary tightening by the Fed may be faster than expected due to high inflation. In a situation of great uncertainty in the stock market, as the Lunar New Year holiday continues, investors are likely to be deeply concerned about whether to liquidate stocks before that.

As the market capitalization of LG Ensol is estimated to be between 100 trillion won and 120 trillion won, some are of the opinion that the starting price will not rise to twice the IPO price. Based on a market cap of 100 trillion won to 120 trillion won, LG Ensol’s stock price on the first day is expected to be in the range of 420,000 to 510,000 won.

On the 26th, Yuanta Securities evaluated the stock price of LG Energy Solution as being in the range of 270,000 to 510,000 won, and suggested a target price of 390,000 won, the median price.

Hwang Gyu-won, a researcher at Yuanta Securities, said, “The market capitalization is 63 trillion to 120 trillion won by applying the relative value of operating profit before amortization (EV/EBITA) compared to the corporate values ​​of listed battery companies such as CATL and Samsung SDI in China. It is expected to be ~510,000 won and the average value will be 390,000 won with a market cap of 92 trillion won.”

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