LG Energy Solution's IPO Imminent... Short Selling Concentrates on Samsung SDI

[Asia Economy Reporter Ji Yeon-jin] As the IPO of electric vehicle battery manufacturer LG Energy Solution approaches, investors have started betting on a decline in the stock price of its competitor Samsung SDI.

According to the Korea Exchange on the 16th, Samsung SDI recorded the highest short-selling transaction amount in the KOSPI market, with short-selling trades worth 19.5 billion KRW conducted the previous day. The stock had also seen short-selling transactions worth approximately 24.3 billion KRW the day before that. This is the third-largest amount following LG Chem (46 billion KRW) and Kakao (28.8 billion KRW), which were the top short-selling stocks on the same day. The short-selling amount for LG Chem the previous day was 12.9 billion KRW, ranking third.

The concentration of short-selling on these stocks is due to the upcoming IPO of LG Energy Solution, considered a record-breaking public offering. This company, established through a spin-off of the electric vehicle battery business from LG Chem, is scheduled to hold its public subscription on the 18th and 19th of next month and to be listed on the 27th of the same month.

Earlier this year, LG Chem was regarded as the leading electric vehicle battery stock, trading above 1 million KRW per share as a blue-chip stock, but its stock price has declined as the LG Energy Solution IPO date approaches. This is because electric vehicle battery investors are expected to buy LG Energy Solution shares instead of LG Chem. As of the previous day, LG Chem’s market capitalization was 49 trillion KRW, down 20 trillion KRW from its peak of 69 trillion KRW this year.

Samsung SDI appears to have become a short-selling target for the same reason. Earlier, on the 14th (local time), Bloomberg reported that “LG Energy Solution, one of the world’s largest electric vehicle battery companies, is going public,” and that its post-IPO corporate value is expected to approach 60 billion USD (70 trillion KRW).

On the same day, Kiwoom Securities slightly lowered its Q4 operating profit estimate for Samsung SDI to 411 billion KRW, a 67% increase compared to the same period last year. However, Kim Ji-san, a researcher at Kiwoom Securities, stated, “The global electric vehicle market grew 133% to 4.67 million units through October, with monthly penetration rates exceeding 10%. Although concerns such as the vehicle semiconductor supply shortage, inflation, and issues related to competitor IPOs are causing adjustments, a mid- to long-term perspective suggests that a buying strategy during these corrections will be effective.”

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