Per reporter: Li Shuo Per editor: He Xiaotao, Pei Jianru
The biggest opponent of the trillion "King of Ning" is coming!
On January 27, South Korea ushered in the largest ever IPO, LG Energy Solutions. LG New Energy's issue price was 300,000 won (about 1,600 yuan) per share, and after the opening of the market, LG New Energy's stock price rose by 99% all the way to 598,000 won.
However, as of 12:30 Beijing time, LG New Energy's stock price fell back to 496,500 won, up 65.5% from the issue price and 16.83% from the opening price, with a market value of 119.67 trillion won (about 631.5 billion yuan). At present, in the list of listed companies in South Korea, LG New Energy is second only to Samsung Electronics.
It is worth noting that LG New Energy is currently the world's second largest power battery producer, second only to the Ningde era. LG New Energy's listing and fundraising this time is intended to challenge the throne of the Ningde era, and LG New Energy CEO Quan Yingshou previously said that it will surpass the Ningde era in global market share and become the world's first.
However, compared with the Ningde era, there is still a certain gap in terms of market value, and the current market value of the Ningde era is 1.37 trillion yuan, which is more than twice that of LG New Energy. In terms of market capitalization, CATL is also the largest manufacturing enterprise in A-shares.
The largest IPO ever in South Korea
4.424 million people snapped up
At the end of 2020, LG Chem's battery business was independent of LG New Energy. After the public offering, LG Chem will still hold 81.8% of LG New Energy's shares.
In June last year, LG New Energy submitted a listing application to the Korea Stock Exchange and plans to complete the listing by the end of the year. But the unexpected came — two months later, it was recalled due to the risk of fire in GM, which was loaded with its batteries, which forced LG's new energy listing plan to be suspended.
It was not until October last year that LG New Energy resumed the IPO process after paying a huge amount of $1.9 billion in reparations to GM. Affected by the GM battery storm, LG new energy executives have a personnel shock, and LG Group Vice President Quan Yingshou succeeded Jin Zhong as CEO and is responsible for the restart of the IPO. In the end, LG New Energy passed the IPO application at the beginning of this year.
Kwon Young-shou. Image source: Screenshot of LG New Energy's official website
Judging from the feedback from the secondary market, Korean investors have given LG New Energy great enthusiasm.
According to the data disclosed by the South Korean Securities Exchange Agency, the cumulative subscription volume of LG New Energy's IPO reached 114 trillion won, and the number of subscribers was 4.424 million, both of which set a record for South Korea. It is also reported that the LG new energy IPO has driven the number of new accounts opened in South Korea, and the new account data of some Korean securities companies has increased by more than 200% compared with previous years.
LG New Energy previously announced that it will raise about 68.3 billion yuan through an initial public offering (IPO), becoming the largest IPO project in South Korea's history. Globally, LG New Energy also became the second largest IPO in the past 12 months, behind U.S. electric vehicle company RICIIAN's $12 billion.
The prospectus discloses that as of the third quarter of 2021, LG New Energy has achieved revenue of 13.4 trillion won (about 71.034 billion yuan) in the same year, an increase of 63.3% year-on-year, while net profit was 0.86 trillion won (about 4.5 billion yuan).
The installed power battery has the second largest market share in the world
Covering many automotive manufacturers
In fact, since LG New Energy divested from its parent company LG Chemical at the end of 2020, its business growth rate has been amazing, ranking second in the world in terms of installed power batteries in the past two years.
According to SNE Research data, from January to November 2021, the cumulative installed capacity of LG New Energy's global power battery was 51.5GWh, an increase of 90% year-on-year, and its market share was 20.5%, ranking second, down 2.1 percentage points from the market share in 2020.
Draft: Per reporter Li Shuo
In recent years, the new energy vehicle market has entered a period of rapid growth. According to the data, the cumulative sales of new energy vehicles in the mainland in 2021 will be 3.521 million units, an increase of 1.6 times year-on-year; the annual sales of new energy vehicles in the United States will be 656,000 units, an increase of nearly 100%; and the annual sales of new energy vehicles in eight European countries (Germany, France, Britain, Norway, Italy, Switzerland, Spain and the Netherlands) will be about 1.95 million units in 2021, an increase of 65% year-on-year. Driven by the high growth of new energy vehicle production and sales, the global power battery production and sales will also increase significantly in 2021.
In the face of the market boom, the power battery industry as a whole is accelerating production expansion, and LG New Energy is no exception. In the prospectus, LG New Energy said that in addition to the plan to develop new products and build smart factories to improve product quality and quality, the rest of the fundraising is used for expansion.
Specifically, its expansion plans are already underway in six countries. LG New Energy will invest 5.6 trillion won to establish a joint venture plant with GM in the United States, 1.4 trillion won to build a factory in Poland, 1.2 trillion won in China, and 64.5 billion won in South Korea. In addition, LG New Energy will also establish a joint plant with the Stellantis Group and Hyundai Motor.
At present, LG New Energy has battery production bases in the United States, China, South Korea, Poland, Indonesia and other places, and plans to increase global battery production capacity from 150GWh in 2021 to 430GWh in 2025, of which the US production capacity is 155GWh, the European production capacity is 145GWh, and the remaining 130GWh production capacity will be distributed in China, South Korea and Hyundai Motor Indonesia joint ventures.
It is worth noting that LG New Energy is the most comprehensive battery supplier for overseas brands besides China's independent car companies, and its relationship with Hyundai Motor Group is particularly close in South Korea. Brands including Volkswagen, GM, Daimler, Ford, Hyundai, Audi, Porsche, Renault, Tesla, etc. are all customers and partners of LG New Energy, such as Tesla Model Y (domestic), Volkswagen ID.4, Ford Mustang Mach-E and other models also have versions equipped with LG new energy power batteries.
On the technical route, LG New Energy previously focused on ternary lithium batteries, and in 2021, it took the lead in mass production of four-yuan lithium batteries (NCMA) that raised nickel and reduced cobalt. It is worth mentioning that the quaternion lithium battery is considered by the industry to better solve the balance of the power battery in terms of range, cost, fast charging and safety, and is expected to make up for the lack of cost and safety of the ternary battery.
However, in the face of the increasingly hot lithium iron phosphate (LFP) technology route, LG new energy technology reserves still need to be strengthened. LG New Energy has previously said that it plans to use lithium iron phosphate batteries in electric vehicles.
The strongest opponent of the Ningde era is coming!
Expert: It will not change the market landscape quickly
At present, the primary competitive target of LG New Energy is the Ningde era, a leading enterprise in the power battery market.
"Looking ahead, LG will compete for the world's first place (in installed power batteries). We are at the forefront of winning over global customers in Europe and the United States. Compared with the Ningde era, the advantages of LG New Energy are mainly reflected in the market outside China. Quan Yingshou, vice president of LG Group and CEO of LG New Energy, previously said in an interview with local media.
The data shows that in 2020, in the global market excluding China, LG's installed capacity of new energy was 26.8GWh, accounting for 33.1% of the market share, ranking first; compared with the installed capacity of the Ningde era was 5.3GWh, with a market share of only 6.5%, ranking fifth.
After the successful IPO, LG's new energy competitiveness is expected to be greatly improved. "The power battery industry is ushering in a new round of rapid development, in this process, the competition of head enterprises will become increasingly fierce, investment and expansion scale is unprecedented, the demand for funds and resources has increased sharply, through the listing can obtain more efficient and lower cost financing, but also can introduce more resources." Yu Qingjiao, secretary general of the Zhongguancun New Battery Technology Innovation Alliance and chairman of the Battery Hundred People's Association, told reporters.
This is also considered by the industry to be the main reason for LG New Energy's divestiture from LG Chemical at the end of 2020. At that time, LG Chem said that considering the rapid development of electric vehicles, it was necessary to invest more than 3 trillion won (about 17.8 billion yuan) in the battery business every year, but this became increasingly unbearable for LG Chem, which had a large funding gap. Some people believe that LG Chem's separate divestiture of the battery business is precisely to provide the possibility for LG New Energy to raise funds in the form of an IPO.
However, although LG New Energy has obtained "ammunition supply" in the capital market this time, there is still a big gap between its profitability and the Ningde era. The two financial reports show that the gross profit margin of CATL has remained above 27% all year round, of which the net profit has remained at 10%. The net profit margin of LG New Energy (previously LG Chemical Battery Business) has been very low, hovering near the break-even line for many years.
Zhang Xiuyang, secretary general of the China Passenger Car Industry Alliance, believes that CATL is in China's largest automobile consumption and new energy vehicle market, and it has more advantages in the domestic supply chain system and the layout of car-enterprise relations. The active cooperation of LG New Energy overseas brands is indeed a big potential competitor of the Ningde era.
"LG new energy listing will short-term incentives for the performance of related sectors, but its listing will not quickly change the market pattern, the current competition of power batteries is the key, the first is production capacity, the second is technology, and these two aspects are not in the short term will change, but in the long run will further increase the competition in the power battery industry, weaken the yield of power battery products, stimulate related companies to continue to invest in expanding production capacity and technological breakthroughs." Shen Meng, executive director of Chanson Capital, told reporters.
Reporter | Li Shuo
Editor| He Xiaotao, Pei Jianru, Du Hengfeng
Proofread | duan lian
| the original article of the daily economic news nbdnews |
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