[IPO Spotlight] GI Tech Rides Hydrogen Ecosystem Wave, Anticipated to Succeed

[Asia Economy Reporter Hyungsoo Park] GI Tech, a developer of electrode products for secondary batteries and hydrogen fuel cells, is set to be listed on the KOSDAQ market. Numerous major domestic companies, including Hyundai Motor, have pledged large-scale investments to activate the hydrogen economy. As attention focuses on hydrogen-related companies, expectations for GI Tech's subscription success have also grown.

According to the Financial Supervisory Service's electronic disclosure system on the 9th, GI Tech will conduct a public offering subscription for listing on the KOSDAQ market over two days from the 12th to the 13th of next month. It will issue 2 million new shares and add 700,000 existing shares for a total of 2.7 million shares offered. The lead underwriter, Mirae Asset Securities, proposed a price range of 11,500 to 13,100 KRW per share. Based on the lower end of the price range, 23.2 billion KRW will be raised. The final offering price will be determined after a two-day demand forecast targeting institutional investors from the 5th of next month.

Since 2018, GI Tech has been producing its main product, slot dies for secondary batteries. Slot dies are one of the core components of roll-to-roll equipment that coats electrode slurry onto the current collector, which acts as a substrate in the electrode process of secondary batteries. They play a role in determining the electrode area, thickness, and coating pattern design. GI Tech conducts flow analysis based on laminar and turbulent flow and critical values using materials provided by customers, then proposes optimized slot die products through its own simulations. Sales increased from 8.8 billion KRW in 2018 to 17.2 billion KRW last year. In the first half of this year, sales reached 8.4 billion KRW.

Building on the technological expertise developed with slot die products for secondary batteries, GI Tech is also developing supply devices for electrode coating and separator coating products for hydrogen vehicles. GI Tech is participating in the ‘2021 Hydrogen Mobility+ Show’ held over four days from the 8th to the 11th at KINTEX in Ilsan. It will showcase hydrogen fuel cell slot dies, wear-resistant products such as carbide slot dies, custom-made slot dies tailored to customer needs, and chemical supply devices.

Of the funds raised through the initial public offering (IPO), GI Tech plans to use 9.8 billion KRW for facility investments. The company will relocate its headquarters to the BIT Industrial Complex in Cheonan to attract new talented personnel by improving working conditions. The land purchase budget is 17.6 billion KRW, with 1.7 billion KRW paid as a deposit for the sales contract. Of the remaining 15.9 billion KRW, 9 billion KRW will be spent from the public offering funds. Another 800 million KRW will be invested in expanding new equipment. The remaining funds will be allocated as follows: 4 billion KRW for debt repayment, 5.4 billion KRW for operating expenses including raw material purchases and establishing overseas branches. Additionally, 4 billion KRW will be invested to attract excellent research and development (R&D) personnel and secure stable production capacity.

The offering price range was calculated by referencing four companies: Cowintech, V1 Tech, Wonik P&E, and NS. A discount rate of 16.2% to 26.0% was applied based on the average price-to-earnings ratio (PER) of 32.2 times for these four companies.