LG CNS IPO course of positive factors traction

LG CNS CEO Hyun Shin-gyoon, middle, speaks throughout a press convention on the corporate’s preliminary public providing on the Conrad Seoul in Yeouido, Jan. 9. Yonhap

LG CNS’ preliminary public providing (IPO) is gaining traction, with the corporate setting its providing worth on the excessive finish of its desired worth vary. With subscriptions for retail traders set to open on Tuesday, there may be rising curiosity in how a lot the inventory worth will surge on its debut day.

Based on its regulatory submitting, Monday, LG CNS finalized its public providing worth at 61,900 received, the very best restrict of the proposed vary of 53,700 received ($37.01) to 61,900 received.

A complete 2,059 institutional traders participated within the e book constructing course of, proposing their desired costs and variety of shares. Based on the corporate, the full sum of money proposed in the course of the course of reached 76 trillion received, with about 99 % of them proposing over 61,900 received per share.

Since LG CNS will supply over 19.37 million shares, the corporate will have the ability to elevate 1.2 trillion received ($823.55 million), which would be the largest quantity following LG Vitality Answer’s profitable IPO in 2022, which raised 12 trillion received. It will make LG CNS valued at roughly 6 trillion received.

Gaining curiosity is the closing worth for the primary day of its buying and selling.

LG CNS offers system growth, operation and cloud providers primarily based on its software program capabilities, and is now increasing its enterprise to digital transformation, cloud computing, sensible factories and synthetic intelligence (AI).

Since 2020, the corporate has been shattering information in its yearly revenues, with working revenue additionally displaying an analogous trajectory. Its gross sales grew by 66.8 % from 3.36 trillion received in 2020 to five.6 trillion received in 2023. The corporate additionally reported 3.54 trillion received in collected gross sales from January to September final yr.

On Monday, the corporate mentioned it signed a memorandum of understanding with U.S.-based Bear Robotics on growing logistics automation options primarily based on autonomous cellular robots.

Hanwha Securities analyst Eom Su-jin mentioned LG CNS is engaging in its strong income development, transition to AI, gross sales outdoors of LG Group and excessive working margin, noting that “the corporate’s enterprise portfolio is increasing from supporting digital transformation to AI transformation.”

LG Science Park in southwestern Seoul, residence to LG CNS headquarters / Courtesy of LG CNS

Weighing on LG CNS’ worth is traders’ issues that the 50 % of shares provided by the IPO are current shares. Because of this the IPO could profit exiting traders as a substitute of being a useful resource for the corporate’s funding.

The 50 % of the shares which will likely be provided for the IPO are held by a particular objective firm arrange by Macquarie Personal Fairness. The corporate, named Chrystal Korea, is the second-largest shareholder in LG CNS.

As a consequence of this construction, analysts usually evaluate LG CNS’ IPO with that of HD Hyundai Marine Answer, which comprised 50 % of its providing with current shares. Upon its debut in Might, the ship components firm noticed its share worth find yourself rising 96.52 % on the primary day of its buying and selling, a disappointing improve on condition that many newly listed shares doubled and even quadrupled throughout their debut.

In response to those issues, LG CNS’ largest shareholder, LG Corp., and Chrystal Korea determined to lock up their holdings — 67.51 % of all LG CNS shares — for six months following the IPO, which can deal with fears that an extra chunk of shares could also be put up on the market shortly after the itemizing.

“We want to categorical a deep gratitude to institutional traders who’ve extremely evaluated LG CNS’ potential for future development as a frontrunner in clients‘ digital transformation,” LG CNS CEO Hyun Shin-gyoon mentioned in a press release.

“By way of this IPO, we intention to additional improve our technological capabilities and actively increase our international operations to guide the worldwide AI transformation market.”