Written by 丨 Liu Bo Yang Jiyun
Source 丨Tiantian IPO
The largest IPO of the year was born.
Today (January 27), South Korean battery manufacturer LG New Energy was officially listed on the Korean Stock Exchange, raising 68 billion yuan, creating the largest IPO in South Korean history. On the first day of listing, LG New Energy soared 99%, with a market value of 750 billion yuan, becoming the third largest listed company in South Korea. As of press time, the market value fell back to 580 billion.
This is the strongest opponent in the Ningde era. Born from the long-established LG Group, LG New Energy has been completely suppressed by the Ningde era for a long time, but in 2020, it began to break into the whole corner of Tesla's supply chain and won huge orders from the Shanghai Gigafactory, and the momentum became fierce. LG New Energy CEO Quan Yingshou said that it will surpass the Ningde era in global market share and become the world's first.
Batteries are surging behind us, and behind them are we entering an electrical era. The battery is the infrastructure of the new era, who can control the right to speak, who has the opportunity to become the next richest man in the world. So we see that in 2021, a large amount of financing was born in the field of domestic power batteries, and super unicorns such as Hive Energy, AVIC Lithium Battery, and Hydrogen Chen New Energy emerged. For a time, VC/PE with head and face are investing in battery companies. This is a super track that is related to the national fortune and the future.
Starting from cosmetics, the battery overlord came
The market value was once 750 billion
The story of LG New Energy is inseparable from the global giant behind it - LG Group.
In 1947, the predecessor of LG Group, Lexi Chemical Industry Association, was founded by GuRenhui and initially only produced cosmetics. In the decades that followed, LG grew into an international giant covering chemical energy, electrical and electronics, and communication services. Among them, the chemical energy business is LG's top priority.
In the 1990s, lithium-ion batteries were officially born and were first applied by The Sony Group of Japan to electronic devices such as mobile phones. Faced with a huge market demand, LG naturally did not want to miss it, so it decided to let the chemical business department carry out research. However, due to the lack of battery-related professionals and the frustration of seeking cooperation with Japanese companies, LG Chem did not achieve mass production of lithium batteries until 1999.
However, the unsustainable returns have made the battery business a focus of internal controversy at LG. Finally, at a management meeting in 2001, the third-generation head of LG, Shigeru Kumoto, said: "I think it is right to continue the battery business." Start over with the belief that it will succeed. Don't give up, look far ahead, and focus more on research and development. ”
Under Shigeru Kumoto's leadership, LG Chem's battery business is on track. After entering the 21st century, many car companies began to explore electric vehicles, and LG Chem also began to lay out lithium-ion power batteries. They first won an order from the local car company Hyundai Motor in 2007, and then became the battery supplier of Volt, a General Motors electric vehicle project, and LG Chem's situation in the automotive field has been completely opened.
At this time, a crucial figure appeared, he was the eldest son of Aya Kumoto, the younger brother of Shigeru Kumoto, who was also the current head of LG. A graduate of the Rochester Institute of Technology, Ku joined LG Electronics as a senior manager in 2006 and was promoted to executive in 2015. Three years later, the 40-year-old Ku Guangmo was elected as the new president of LG, becoming the fourth generation of leaders.
With light and light
Before Gu Guangmo took office, LG Chem's battery business suffered a strong impact from the Ningde era, so he began a more aggressive expansion policy as soon as he took office. Under his leadership, LG Chem first hired Xin Xuezhe, former chief vice chairman of 3M, as vice chairman in November 2018, which was the first time in the company's history to bring in executives from outside, and then formulated a plan, such as investing 1.2 trillion won (about 7.26 billion yuan) to expand the battery production line in Nanjing, China, by 2020 to cope with the increase in global demand for cylindrical batteries.
Also under the leadership of Gu Guangmo, LG Chem ushered in a milestone on December 1, 2020 - LG New Energy was established, realizing the split of the chemical battery business.
Since then, LG New Energy has embarked on the road to IPO. 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.
On the eve of the IPO, LG New Energy's cumulative subscription reached 114.06 trillion won, and the number of subscribers was a staggering 4.424 million, both of which set a record for South Korea. Today, LG New Energy's official IPO rang the bell, with an issue price of 300,000 won (about 1601 yuan), opening up 99%, and the opening market value reached about 750 billion yuan, becoming the second largest listed company in South Korea after Samsung Electronics.
Declaration of war in the Ningde era: to be the first in the world
Zeng Yuqun's biggest rival
Why is LG New Energy so popular?
As early as the beginning of the spin-off independence, LG New Energy showed its ambitions, saying that it expects sales of 13 trillion won (about 76.7 billion yuan) in 2021 and plans to achieve sales of more than 30 trillion won (about 177 billion yuan) in 2024, becoming the world's leading energy solution provider.
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, which has obviously exceeded the annual target set by the company.
However, it is worth noting that losses are still a topic that LG New Energy cannot avoid. According to the prospectus, LG New Energy's net profit in the first three quarters from 2019 to 2021 was -0.43 trillion, -0.45 trillion and 0.86 trillion won, respectively. This also means that in less than three years, LG New Energy has lost nearly 5 billion yuan. However, fortunately, in the first three quarters of 2021, the gross profit margin of LG New Energy is positive, or it is expected to achieve annual profitability.
Starting in 2020, LG New Energy successfully entered Tesla's supply chain and won huge orders for Model 3 and Model Y from the Shanghai Gigafactory. In addition, LG New Energy's other important customers include Ford, Volkswagen, Audi, Daimler, Renault, Jaguar, Porsche and other well-known foreign car companies.
Sitting on many European and American customers, it is precisely where LG New Energy's confidence lies. At the beginning of January this year, LG New Energy CEO Quan Yingshou said in an interview with the media, "We have a large backlog of orders in our hands, and it is expected that the global market share will surpass the Ningde era and become the world's first." ”
He bluntly said that the high dependence of CATL on Chinese customers is a weakness, "we are in a leading position in winning global customers in Europe and the United States." ”
Quan Yingshou chose to declare war on the Ningde era because the latter has been at the top for many years and is the opponent that LG New Energy most wants to defeat.
From the perspective of market capitalization, the latest market value of the Ningde era is as high as 1.4 trillion yuan, which is more than twice that of LG New Energy, and it is obvious that the scale of the two is not in the order of magnitude. According to the data of the research agency SNE, the power battery market of the Catalonia era from January to November last year supplied 79.8GWh, with a market share of 31.8%, ranking first; while LG new energy was 51.5GWh, with a market share of 20.5%, a difference of about 11 percentage points.
In addition, LG New Energy's latest capacity planning is to increase from 150GWh in 2021 to 430GWh in 2025; while public information shows that the planned capacity of the Cataline Era before 2025 is close to 600GWh.
Of course, the Ningde era is not unchallengable. On January 12, LG New Energy signed a five-year purchase order with Australian lithium miner Liontown Resources. According to the contract signed by the two parties, starting in 2024, Liontown will supply LG with 100,000 dry tons/year of spodumene concentrate, and eventually a total supply of 700,000 dry tons, which can be enough to produce batteries for 2.5 million electric vehicles.
In the face of provocation, the trillion "King of Ning" launched a counterattack war. On January 7 this year, CATL signed a long-term supply agreement with Ronbay Technology, the largest supplier of ternary cathode materials in China, according to the agreement, CATL is expected to purchase about 100,000 tons of high-nickel ternary cathode materials from Ronbay Technology in 2022. Subsequently, CATL released the power exchange brand EVOGO, officially entering the field of power exchange, and the power exchange products will be for all car companies.
In fact, Zeng Yuqun was also aware that the Ningde era was surrounded by wolves. As early as 2017, he has realized the fierce competition, and once reminded employees in internal emails that when everyone lies on the hotbed of policy and sleeps, competitors are facing the critical moment of life and death, "Negative, short-sighted behavior must ultimately bring about career failure, life failure, and collective short-sightedness will affect the progress of the company and ultimately cause the company's failure." ”
Nowadays, the Ningde era has ushered in a super opponent, and the peak showdown of the global battery jianghu has begun.
VC/PE made a big splash, and this track exploded
The next richest man in the world is here
The listing of LG New Energy and the trillion market value of the Ningde era can be called the epitome of the global power battery industry explosion.
Since 2021, the financing in the domestic power battery field can be described as crazy. First, let's take a look at the new super unicorn Hive Energy: On January 17 this year, Hailiang increased its capital by 322 million yuan, accounting for 0.7%, calculating the valuation of Hive Energy to a staggering 46 billion.
Since February last year, in less than a year, Hive Energy has received 5 consecutive rounds of financing. In late February last year, Hive Energy received 3.5 billion yuan of Series A financing, a month later received Series A+, in July, Hive Energy received 10.28 billion yuan of Series B financing, with a post-investment valuation of 36 billion yuan, and by December, the B+ round of financing was in place. Such a non-stop rhythm is the tip of the iceberg of the power battery.
Yang Hongxin, chairman and CEO of Hive Energy, revealed at the signing ceremony of the A round of financing that in the process of the A round of financing, many institutions did not allocate enough amounts to want.
Wang Zhikun, executive vice president of Hive Energy, revealed more details of financing: "In fact, more than 100 institutions have approached us and asked to invest in Hive Energy. He said that Hive Energy held an investment briefing in May, and the list of investment institutions was basically determined at the end of June. But in July, there are still many investment institutions to come to the door to want to invest in the amount, Hive Energy considering that the team should calm down, should do a good job of financing.
Tens of billions of financing is not uncommon on this track. In September 2021, AVIC Lithium Battery completed a 12 billion equity financing; in addition, Huineng Technology, which invented the world's first solid-state lithium ceramic battery, completed a new round of financing of US$326 million; Lin Li New Energy, which focuses on the industrialization of high-performance iron phosphate materials, was also just invested last year.
Now, almost all VCs/PE with heads and faces are throwing power batteries. In the past year, dozens of VC/PE institutions, including Sequoia China, Shenzhen Venture Capital, IDG Capital, Hillhouse Venture Capital, Legend Capital, Primavera Capital, Cathay Fund, Lightspeed China, SoftBank China, etc., as well as industrial funds such as CATL Times, Great Wall Motors, Xiaomi Yangtze River Industry Fund, and Guangzhou Investment Capital, have extended their tentacles to the power battery track.
At the same time, BYD is also menacing, after the official launch of blade batteries in March 2020, it has successively landed power battery bases, and plans to spin off BYD's power battery business from 2022 to 2023. This means that the battery jianghu is about to usher in a super IPO.
Why are power batteries so hot? The reason is that one is the inevitable demand for the transformation of the automobile industry under the background of double carbon - power battery is the most core material of new energy vehicles; second, the rise of the energy storage industry has made the power battery market rise linearly.
As the market circulates, whoever can solve the bottleneck of battery energy storage has the opportunity to become the next richest man in the world.
Even hard technology investors sighed in the circle of friends: "Not laying out the core link of new energy (new materials) today is equivalent to looking at real estate twenty years ago." ”
This is a battle for energy security in the future. Not long ago, a very wind vane news came out - the mainland should put the promotion of new energy and clean energy development in a more prominent position, actively and orderly development of optical energy, silicon energy, hydrogen energy, renewable energy; to increase efforts to plan and build a new energy supply and consumption system based on large-scale wind and photovoltaic bases.
At present, when the concept of carbon neutrality continues to sweep the venture capital circle, new energy is collectively exploding in the primary and secondary markets. This week, the photovoltaic giant JinkoSolar officially landed on the science and technology innovation board, soaring 111% on the first day of listing, and the market value exceeded the 100 billion mark; in addition, there are some secondary market targets, because of the entry into the new energy field, the stock price has soared. Back to the primary market, this vast world makes everyone believe that "there is a lot to do".
This is also a track related to the national fortunes. The founder of a local institution in East China once lamented, "Energy is a more important arms race than semiconductors, because semiconductors are a matter of whether we live well or not, and energy determines whether we can live or not." "All of us are standing at a turning point in history.
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