Ningde era rival LG New Energy listed, opening stock price rose 99%

According to foreign media reports, on January 27, South Korean battery manufacturer LG New Energy was listed in Seoul, South Korea, and the company's stock price briefly doubled on the first day of listing. LG New Energy raised nearly $11 billion through an initial public offering (IPO), making it the largest IPO ever in South Korea.

On the same day, shortly after the opening of the market, LG New Energy's stock price was 99% higher than its issue price (300,000 won), but then fell back. As of 9:21 a.m. South Korea time, LG New Energy's stock price was 499,000 won, and its market value reached 116.8 trillion won ($97.2 billion), making it the second largest stock in South Korea after Samsung Electronics.

LG New Energy raised 12.75 trillion won ($10.7 billion) in its IPO to sell its shares at the highest price in the previously announced issue price range. LG New Energy was the world's second largest IPO after Rivian in the past year, about 2.5 times the size of Samsung Life Insurance. Samsung Life insurance company is the company that previously set a record IPO size in South Korea.

LG New Energy's huge deals have attracted a large number of individual and institutional investors, suggesting that investor demand for South Korean new stocks continues to increase after last year's record IPO. The offering was so popular that it affected the liquidity of stocks already traded, making the Korea Composite Share Price Index (Kospi) the worst-performing national stock benchmark index in Asia this year.

(Image source: LG New Energy)

LG Chem will retain an 81.8 percent stake in its battery subsidiary, LG New Energy. Due to the limited liquidity of shares, coupled with the fact that a large number of investors have not been able to buy before listing, LG New Energy's stock price may fluctuate significantly in the short term.

Kang Dong-Jin, an analyst at Hyundai Motor Securities, said before the stock was traded, "The market demand for LG New Energy is very large, but there are too few stocks, so in the short term, the volatility of LG New Energy's stock price will be very large." ”

Cho Byung-Hyun, an analyst at Yuanta Securities Korea, believes the new market giant may continue to attract money from other South Korean stock markets.

LG New Energy's first-day performance continued the recent strong first-day performance of large Korean companies. Biopharmaceutical company SK Bioscience, the world's best performer in an IPO last year, went public in Seoul last March and has seen its share price rise 160% since its listing.

LG New Energy is looking to increase battery capacity to meet the rapidly growing global demand for electric vehicle batteries and improve battery quality. Previously, GM recalled a large number of Bolt electric vehicles that used LG's new energy defective batteries, after which its parent company LG Chemical paid GM $1.9 billion. The company also hopes to close the gap with the battery market leader Catalpa Era.