SKIET to Go Public in May... Corporate Value Up to 7.5 Trillion Won

[Asia Economy Reporter Hwang Yoon-joo] SK Innovation's materials business subsidiary SK IE Technology (SKIET) submitted a securities registration statement to the Financial Services Commission on the 31st and is entering the full-scale public offering process aiming for a listing on the KOSPI market in May.

On the 31st, SKIET held an extraordinary board meeting and decided to issue 8,556,000 new shares. The parent company SK Innovation also held an extraordinary board meeting on the same day and resolved to sell 12,834,000 existing shares, equivalent to 22.7% of its 90% stake in SKIET, through a secondary offering.

As a result, the total number of SKIET shares offered in the public offering will be 21,390,000 shares, accounting for 30% of the total issued shares (post-offering). The expected price range per SKIET share is from 78,000 KRW to 105,000 KRW. Based on this, the company’s valuation is estimated to be approximately 5.6 trillion KRW to 7.5 trillion KRW.

If the public offering is successfully completed, SK Innovation and SKIET can secure up to about 2.3 trillion KRW in investment funds. The funds raised through the offering will be used as investment capital to further advance SK Innovation group’s businesses in new growth industries such as batteries and separators.

The demand forecast for institutional investors will be conducted over two days from April 22 to 23. Based on the final public offering price determined through this process, subscription for general investors will be held on April 28 and 29. Trading is expected to commence on the exchange around mid-May.

Mirae Asset Securities and JP Morgan are the lead underwriters for SKIET’s public offering, with Korea Investment & Securities and Credit Suisse (CS) acting as joint underwriters. The offering allocation ratio is 55% for institutional investors, 25% for general investors, and 20% for employee stock ownership associations.

SKIET is engaged in the production and sale of battery materials. In particular, it holds global competitiveness in the manufacturing of lithium-ion battery separators (LiBS), which are essential materials for improving battery performance and ensuring safety. Additionally, SKIET is focusing on next-generation flexible cover windows (FCW), a type of transparent polyimide (PI) film, as a new growth engine.

To keep pace with the explosive increase in separator demand, SKIET recently decided to invest 1.13 trillion KRW to build its 3rd and 4th plants in Poland. SKIET’s strategy is to proactively invest and enhance its technological capabilities in key global electric vehicle markets to meet the rapidly growing separator demand. By 2024, when plants in Korea, Changzhou (China), and Silesia (Poland) are all operational, SKIET’s annual separator production capacity is expected to reach a total of 2.7 billion square meters.

Responding to market demand, SKIET achieved strong performance last year. Based on consolidated financial statements for 2020, sales reached 469.3 billion KRW, a 78.4% increase compared to the previous year (reflected from Q2 to Q4 2019 based on the spin-off period). Operating profit and net income also rose by 55.4% and 38.4%, reaching approximately 125.2 billion KRW and 88.2 billion KRW, respectively.

According to market research firm SNE Research, SKIET ranked first in the global ‘Tier 1’ wet separator market last year with a 26.5% market share, expanding its dominance in the premium separator market. Tier 1 refers to leading original equipment manufacturers (OEMs) in the electric vehicle market such as Tesla, Volkswagen, Renault-Nissan, Toyota, and Hyundai-Kia. The Tier 1 separator market consists of suppliers providing separators to these companies. Only companies capable of producing high-quality separators, including SKIET, Japan’s Asahi Kasei, and Toray, have entered this market.

SNE Research forecasts that the market share of Tier 1 separator companies in the overall separator market will increase from 43% in 2018 to 63% in 2025.

This content was produced with the assistance of AI translation services.