Daily BriefsECM

Equity Capital Markets: LG Energy Solution, SKonec Entertainment, JL Mag Rare-Earth Co Ltd and more

In today’s briefing:

  • LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)
  • LG Energy IPO – Valuation
  • Skonec Entertainment IPO Preview
  • JL Mag Rare-Earth H-Share Listing: Valuation Insights

LG Energy Passive Flow from Overseas ETFs: Global X Lithium & Battery (LIT)

By Sanghyun Park

  • Given the AUM of the Global X Lithium Battery ETF (ticker: LIT), the potential passive impact on LG Energy and LG Chem should be worthy of our careful attention.
  • If LIT revises its methodology, the timing to include LG Energy is expected to be the April rebalancing.
  • LG Energy will have a 2-3% index weight, welcoming a passive inflow of ₩130-200B (0.2-0.3% of SO). In contrast, ₩232.1B from LIT will likely escape LG Chem, 0.5% of SO.

LG Energy IPO – Valuation

By Mio Kato

  • LG Energy is being benchmarked against CATL for its IPO valuation and we believe this is incorrect.
  • CATL’s position within China’s supply chain and LFP technology should drive a significant premium against other North Asian peers in our view. 
  • If LG Energy were to simply be benchmarked against Samsung SDI it starts to look expensive and while a premium may be reasonable we do not consider it a given.

Skonec Entertainment IPO Preview

By Douglas Kim

  • SKonec Entertainment (276040 KS), which specializes in VR based metaverse technologies, is getting ready to complete an IPO in the Korean stock market in the next several weeks.
  • Currently, Skonec Entertainment has a gray market value of 34,000 won, which is 183% higher than the high end of the IPO price range of 12,000 won. 
  • The company has been one of the first game companies to develop VR based gun shooting games in Korea.

JL Mag Rare-Earth H-Share Listing: Valuation Insights

By Arun George

  • JL Mag Rare-Earth Co Ltd (300748 CH) is a leading producer of high-performance rare earth permanent magnets. It has launched an H-Share listing to raise $570 million at the mid-point. 
  • In JL Mag Rare-Earth Secondary Listing: Magnetic Moments, we stated that it has attractive fundamentals and the secondary listing is worth a closer look. 
  • Our valuation analysis suggests that the H-Share price range is fair. Pricing is expected on 17 January with an H-Share listing on 14 January.

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