[IPO Spotlight] J.O, 20 Years of Dedicated R&D... Challenging IPO with CNT

Successful Mass Production of CNT for Secondary Battery Anode Materials... R&D Since 2003
CNT Division Sales: 11.3 Billion KRW This Year → 106.3 Billion KRW by 2025
Investment in Annual 3,000t Production Facility Expansion Using Public Offering Funds

[Asia Economy Reporter Park Hyungsoo] JEO, a carbon nanotube (CNT) manufacturer for secondary battery conductive materials, has launched fundraising through an initial public offering (IPO) to actively expand its production capacity.

According to the Financial Supervisory Service's electronic disclosure system on the 13th, JEO plans to list on the KOSDAQ market next month and will offer a total of 8,197,100 shares. The desired price range per share is set between 15,000 and 18,000 KRW. From the 19th to the 20th, a demand forecast will be conducted targeting institutional investors, and the offering price will be finalized. The lead underwriter is Korea Investment & Securities.

Established in 1994, JEO is a plant engineering company providing services related to engineering, procurement, and construction (EPC), including process design, basic and detailed design, project management, and commissioning across various industrial sectors. As of the first half of this year, the plant engineering segment accounted for 88% of total sales. In the first half of this year, the company recorded sales of 32.7 billion KRW and an operating loss of 2.8 billion KRW. Sales from the plant engineering and CNT segments were 28.8 billion KRW and 3.9 billion KRW, respectively.

JEO established a separate corporate research institute in 2003 and has continuously conducted research and development on CNT. CNT is a new material expected to replace carbon black, which has been traditionally used as a conductive material for secondary batteries. Leveraging its experience in designing and manufacturing material production facilities accumulated from the plant engineering business, JEO independently produced CNT-related production equipment. Since 2014, it has been conducting R&D on non-ferrous CNT for secondary batteries with Samsung SDI, and in the following year succeeded in mass-producing non-ferrous CNT (JENOTUBE 10B) for cathode conductive materials. Demand is increasing to adopt it as an anode conductive material for secondary batteries. Negotiations are underway to sign supply contracts with secondary battery manufacturers. SK Innovation invested 15 billion KRW last year as a strategic investor (SI).

CEO Kang Deukju graduated from Inha University with a degree in Polymer Engineering and previously worked at Yeongin Science and JEOTEC. He has directly participated in various R&D activities at JEO's corporate research institute, contributing to related research and commercialization. After the listing, his shareholding ratio is expected to be 27.01%.

JEO is continuously investing in expansion to meet the growing demand for CNT as a conductive material for secondary batteries. Production capacity is being expanded from 300 tons per year to 1,000 tons, with plans to increase to over 3,000 tons annually by 2025.

The reason for raising funds through the IPO is also related to expansion investments. JEO expects to raise at least 120 billion KRW through the KOSDAQ listing. Of the raised funds, 103.5 billion KRW will be used for securing production sites, constructing factories, and investing in equipment. The remaining funds will be allocated to research and development (R&D) expenses and operating costs.

Even the fund usage plan shows a strong commitment to growth through CNT. The underwriter excluded the value of the plant engineering business segment when assessing JEO's appropriate corporate value, citing the volatility of the plant engineering segment's performance. The CNT segment's corporate value was estimated by selecting secondary battery material companies such as EcoPro BM, Iljin Materials, Chunbo, and Cosmo Advanced Materials as comparables. Considering the industry characteristics involving large-scale equipment and facility investments, EBITDA (earnings before interest, taxes, depreciation, and amortization) was applied. Based on the average EV/EBITDA ratio of 32.1 times for comparable companies and estimated 2025 performance, JEO's CNT segment value was estimated at 774.4 billion KRW.

CNT segment sales are expected to increase from 11.3 billion KRW this year to 106.3 billion KRW in 2025. With the expansion of production capacity for core products and supply both domestically and internationally, sales are anticipated to surge. CEO Kang Deukju of JEO stated, "We will strengthen our market-leading position through investments in the CNT field," adding, "Funds raised through the offering will be used for facility investments to expand production capacity and for product research and development."

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