Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

LG Energy Solution / Equity Capital Markets

<ul>
<li>Our base case valuation of LG Energy Solution is price per share of 424,093 won, which is 41% higher than the high end of the IPO price of 300,000 won.</li>
<li>Our valuation is based on 29.8x EV/EBITDA multiple times our estimated EBITDA of 3,276 billion won in 2022, resulting in EV of 97.5 trillion won.</li>
<li>Given the attractive upside, we have a positive view of the LG Energy Solution IPO.</li>
</ul>


Our base case valuation of LG Energy Solution is price per share of 424,093 won, which is 41% higher than the high end of the IPO price of 300,000 won.
Our valuation is based on 29.8x EV/EBITDA multiple times our estimated EBITDA of 3,276 billion won in 2022, resulting in EV of 97.5 trillion won.
Given the attractive upside, we have a positive view of the LG Energy Solution IPO.


LG Energy Solution IPO Valuation Analysis: An Attractive IPO with a 40%+ Upside

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li><strong>Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs. </strong></li>
<li>Trading debuts across different markets have been poor. But there are some trades to be put for lock-up expiries.</li>
<li>This will be our last week of ECM weekly notes for the year. Our weekly notes will be back in January when things start to pick up again.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs. 
Trading debuts across different markets have been poor. But there are some trades to be put for lock-up expiries.
This will be our last week of ECM weekly notes for the year. Our weekly notes will be back in January when things start to pick up again.


ECM Weekly (19th December 2021) - LG Energy, Hyundai Engineering, Chervon, Sirnaomics, JG Mag A/H

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

Hyundai Engineering   / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hyundai-engineering-co-ltd" target="_blank" data-smartkarma-citation="entities:33008:1" rel="noopener">Hyundai Engineering Co Ltd (HEC KS)</a> is looking to raise up to US$1bn in its upcoming Korea IPO. </li>
<li>Hyundai Engineering is an engineering firm that covers the entire life-cycle, from procurement, development, maintenance post-completion of the building/project.</li>
<li>As per Korea Construction Association in 2021, it ranks 6th position, with a construction capacity of KRW8.5 tn.</li>
</ul>



Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its upcoming Korea IPO. 
Hyundai Engineering is an engineering firm that covers the entire life-cycle, from procurement, development, maintenance post-completion of the building/project.
As per Korea Construction Association in 2021, it ranks 6th position, with a construction capacity of KRW8.5 tn.


Hyundai Engineering Pre-IPO - Order Backlog Aids Visibility However, Margins Have Been Fluctuating

<ul>
<li>In this insight, we discuss about what the locals are saying about LG Energy Solution in Korea to better understand how the locals are thinking about this IPO.</li>
<li>The local market is generally positive on the LG Energy Solution IPO. Valuations are reasonable and many investors expect the IPO to be priced at 300,000 won (high end). </li>
<li>Some of the major issues highlighted by the locals on this IPO include relatively cheap valuation relative to CATL, growing market share globally (ex-China), and low free float post IPO. </li>
</ul>


In this insight, we discuss about what the locals are saying about LG Energy Solution in Korea to better understand how the locals are thinking about this IPO.
The local market is generally positive on the LG Energy Solution IPO. Valuations are reasonable and many investors expect the IPO to be priced at 300,000 won (high end). 
Some of the major issues highlighted by the locals on this IPO include relatively cheap valuation relative to CATL, growing market share globally (ex-China), and low free float post IPO. 


LG Energy Solution - What Are the Locals Saying About This IPO?

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>LG Energy’s IPO prospectus discussed a number of risks to their business on the technological front. </li>
<li>We believe that chief among these is the risk from the rapidly evolving LFP chemistry in China. </li>
<li>The impact on LG Energy’s long term market share is discussed below.</li>
</ul>


LG Energy’s IPO prospectus discussed a number of risks to their business on the technological front. 
We believe that chief among these is the risk from the rapidly evolving LFP chemistry in China. 
The impact on LG Energy’s long term market share is discussed below.


LG Energy IPO – The Technological Risk from LFP

South Korea

LG Energy Solution produces and sells batteries. The Company manufactures and sells automobile batteries, small batteries, energy storage system batteries, and other products. LG Energy Solution markets its products worldwide.

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LG Energy Solution (373220 KS)

LG Energy Solution IPO Valuation Analysis: An Attractive IPO with a 40%+ Upside

Our base case valuation of LG Energy Solution is price per share of 424,093 won, which is 41% higher than the high end of the IPO price of 300,000...

Douglas Kim

ECM Weekly (19th December 2021) - LG Energy, Hyundai Engineering, Chervon, Sirnaomics, JG Mag A/H

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Hyundai Engineering Pre-IPO - Order Backlog Aids Visibility However, Margins Have Been Fluctuating

Hyundai Engineering Co Ltd (HEC KS) is looking to raise up to US$1bn in its upcoming Korea IPO. As per Korea Construction Association in 2021, it...

Clarence Chu

LG Energy Solution - What Are the Locals Saying About This IPO?

The local market is generally positive on the LG Energy Solution IPO. Valuations are reasonable and many investors expect the IPO to be priced at...

Douglas Kim

LG Energy IPO – The Technological Risk from LFP

LG Energy’s IPO prospectus discussed a number of risks to their business including the risk from the rapidly evolving LFP chemistry in China which...

Mio Kato

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