[IPO Spotlight] Iljin Hysolus Prepares for Leap with Expansion of Hydrogen Storage Tanks

Subscription of 7.26 million new shares and sale of 3.63 million existing shares... Total subscription worth 330 billion KRW
Exclusive supplier of hydrogen fuel tanks for Nexo
Investment in expansion in preparation for full-scale hydrogen car mass production

[Asia Economy Reporter Hyungsoo Park] Iljin High Solus, a developer of hydrogen storage containers, has launched an initial public offering (IPO) to raise funds for expansion. Iljin Diamond, the largest shareholder of Iljin High Solus, will raise funds in the range of 100 billion KRW through the sale of existing shares.

According to the Financial Supervisory Service on the 22nd, Iljin High Solus will conduct a demand forecast for institutional investors from the 3rd to the 4th of next month and finalize the public offering price. The total offering size is 10.89 million shares, consisting of 7.26 million new shares and 3.63 million existing shares, with the minimum public offering amount reaching 330 billion KRW. The proposed price range is between 33,000 KRW and 37,300 KRW per share. Iljin High Solus aims to raise 217.7 billion KRW through the IPO.

Iljin High Solus originated from the Korea Composite Materials Research Institute, established in 1999. It was acquired by the Iljin Group in 2011. It is the only company in Korea that produces hydrogen fuel tanks using proprietary technology. It exclusively supplies hydrogen fuel tanks for Hyundai Motor’s hydrogen vehicle, the ‘Nexo.’ Last year, the company recorded sales of 113.5 billion KRW and an operating profit of 15 billion KRW. In the first quarter of this year, it achieved sales of 18 billion KRW and an operating profit of 1.1 billion KRW.

Iljin Diamond will sell 3,631,330 existing shares out of the 25,258,830 shares it holds in Iljin High Solus. The remaining 21,627,500 shares, which account for 59.6% of the post-IPO listed shares, will be newly issued.

Based on world-class hydrogen container development capabilities and mass production technology, Iljin High Solus has developed a hydrogen fuel tank with a maximum operating pressure of 700 Bar, meeting Type 4 standards. A key factor for hydrogen-based transportation is the driving range relative to the weight of the hydrogen fuel tank. Hyundai’s Nexo, equipped with Iljin High Solus hydrogen fuel tanks, secures a driving range exceeding other hydrogen passenger vehicles by more than 20 km on a full charge. It also achieves safety levels more than three times higher than the recognized standard in fire risk assessments. Iljin High Solus products were the first to receive the highest safety rating under the European New Car Assessment Program (NCAP) standards.

Since last year, Iljin High Solus has been selected as a supplier of hydrogen storage system modules and hydrogen storage containers for Hyundai’s hydrogen buses and trucks, expanding its scope from passenger cars to commercial vehicles. Last month, it signed a business agreement with Samsung Heavy Industries to jointly develop hydrogen ships. Additionally, it is developing hydrogen fuel tanks for various transportation means such as drones and railways.

The 217.7 billion KRW raised through the IPO will be used for facility and operating funds. According to the hydrogen economy activation roadmap announced by the Ministry of Trade, Industry and Energy, the domestic hydrogen vehicle adoption rate is expected to increase year by year. Hydrogen passenger cars reached a production volume of 1,800 units in 2018, with a target of 81,000 units next year. The goal for 2040 is 6.2 million units, and the government is also investing in expanding infrastructure including hydrogen charging stations. Hyundai Motor announced through its ‘Hydrogen Car Vision 2030’ that it will expand its current annual production capacity of 11,000 units to 40,000 units next year, and further increase supply to 500,000 units annually by 2030 through continuous investment.

Iljin High Solus, recognizing the need to increase hydrogen storage container production and continuously strengthen development capabilities, plans to invest 163 billion KRW in facilities over the next three years. To enhance new product and technology development capabilities, it aims to complete the construction of a research and development (R&D) center by the end of this year. The remaining 54.7 billion KRW will be used as operating funds.

Although Iljin High Solus leads in technology in the hydrogen storage container field, growth could slow without steady enhancement of development capabilities. Several domestic companies, including Hanwha Solutions and Donghee Industrial, have declared development of hydrogen storage containers and are focusing on technology development. If competitors release products that exceed customer performance requirements, Iljin High Solus’s monopolistic position could be challenged.

Another concern for Iljin High Solus’s growth is the continuity of hydrogen industry promotion policies. If policy support funds related to hydrogen industry growth decrease, sales in the hydrogen business could decline. The hydrogen energy industry is gaining attention as a solution to greenhouse gas reduction goals set by the Paris Climate Agreement. Globally, technology investments and facility construction are underway. The company expressed concerns that growth might slow if new eco-friendly or carbon dioxide reduction energy sources emerge that could replace the hydrogen energy industry.

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