Shinseong ST Invests IPO Funds to Produce Secondary Battery Components in North America

Scheduled for KOSDAQ Listing... Demand Forecast for Institutions on 21-22
Order Backlog Exceeds 1.5 Trillion KRW in First Half of This Year

Shinsung ST, a secondary battery parts company and a subsidiary of Shinsung Delta Tech whose stock price surged on the superconductors theme, is set to be listed on the KOSDAQ market. The company plans to raise investment funds for its entry into the U.S. market through an initial public offering (IPO). It is expected to have growth opportunities as its clients, secondary battery manufacturers, establish production plants locally in the U.S.

According to the Financial Supervisory Service's electronic disclosure system, Shinsung ST will issue 2 million new shares to be listed on the KOSDAQ market. The expected price range for the public offering is 22,000 to 25,000 KRW per share, with a minimum fundraising target of 44 billion KRW. From the 21st to the 22nd, a two-day demand forecast will be conducted targeting institutional investors, and the public offering price will be finalized.

Shinsung ST is a manufacturer of secondary battery parts used in electric vehicles and energy storage systems (ESS). It produces conductive busbars that connect electrical components and module cases that protect batteries from external shocks. Since winning an ESS parts order from LG Energy Solution in 2013, it has been actively expanding its secondary battery business segment. Through domestic secondary battery manufacturers, it supplies parts to 11 automakers including Ford, Volkswagen, and Volvo. The company operates local subsidiaries in Vietnam, China, and Poland. As of the end of the first half of this year, its order backlog exceeds 1.5 trillion KRW.

On a consolidated basis, Shinsung ST recorded sales of 106.5 billion KRW, operating profit of 7.9 billion KRW, and net profit of 9.3 billion KRW last year. In the first half of this year, it achieved sales of 66.4 billion KRW, operating profit of 7.7 billion KRW, and net profit of 7.3 billion KRW.

As domestic secondary battery companies plan local production in the U.S. one after another, Shinsung ST is also pushing forward with establishing a North American subsidiary. The company will set up the subsidiary this year and begin full-scale investment. Among the funds raised through the public offering, 22.7 billion KRW will be invested to secure a production base in North America. Along with local production in the U.S., it will also pursue efficiency improvements in managing its domestic business sites. It plans to use 18.5 billion KRW of the public offering funds to build a domestic business site in the Busan-Jinhae Free Economic Zone. CEO Byeongdu An of Shinsung ST said, "We will leap forward as a global secondary battery solutions company through the KOSDAQ listing," adding, "We will promote the advancement of secondary battery products and diversification of our client base."

Mirae Asset Securities, which is in charge of the listing underwriting, selected Shinheung SEC, Sangshin IDP, Samki EV, and Younghwa Tech as comparable companies to determine the appropriate corporate value of Shinsung ST. Applying the average price-earnings ratio (PER) of 21.8 times of the comparable companies, the per-share value of Shinsung ST is 35,360 KRW. Based on this, a discount rate of 29.3% to 37.8% was applied to propose the public offering price range of 22,000 to 25,000 KRW.

After listing, Shinsung Delta Tech will hold a 25.4% stake (2.3 million shares) in Shinsung ST. Based on the lower end of the public offering price range, this stake is worth approximately 50 billion KRW. CEO Bonsang Koo of Shinsung Delta Tech holds 770,000 shares of Shinsung ST, which could potentially be used as succession funds in the future.

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