"Please Let It Soar" LG Energy Solution Listing One Day Away... Retail Investors 'Anxious'

LG Energy Solution IPO Record-Breaking Subscription Success
US Tightening Fears Cloud Stock Market... KOSPI and NASDAQ Wobble
From 'Double-Opening' Hopes to 'No Negative'... Investors Anxious Amid Market Plunge

Customers are consulting at the Shinhan Financial Investment branch in Yeouido, Seoul, on the 19th, the closing day for the public offering subscription for general investors of LG Energy Solution.
[Image source=Yonhap News]

[Asia Economy Reporter Han Seung-gon] "I'm hoping for a double opening price, but honestly, I'm a bit anxious." , "Everyone around me is talking about LG Energy Solution (LG EnSol)."

The listing of LG Energy Solution (LG EnSol) on the KOSPI market is just one day away. The expected market capitalization after LG EnSol's listing is KRW 70.2 trillion based on the public offering price of KRW 300,000. This ranks third on the KOSPI, following SK Hynix (approximately KRW 89 trillion). This is why LG EnSol led an unprecedented subscription boom.

On the first day of listing, if the opening price is set at double the public offering price (KRW 600,000) and then rises by another 30%, the stock price will reach a high of KRW 780,000. In this case, investors can gain a profit of KRW 480,000 per share.

However, among office workers holding public offering shares, there are various speculations about whether LG EnSol can achieve a 'ttasang' (opening price formed at double the public offering price followed by the upper price limit).

This is because the market continues to be negatively affected by the U.S. Federal Open Market Committee (FOMC)'s tapering (asset purchase reduction) shortening, interest rate hike and quantitative tightening forecasts, and rising concerns over Russia's invasion of Ukraine.

On the 25th (local time), the Nasdaq index closed down 2.28% (315.83 points) at 13,539.29. The Nasdaq index has fallen 13.5% this year through the 25th. Compared to the all-time high on November 19 last year, it has dropped 15.7%.

On the afternoon of the 25th, an employee is passing in front of the electronic display board in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. [Image source=Yonhap News]

Domestically, the so-called 'fear index,' the KOSPI 200 Volatility Index (VKOSPI), is also soaring. According to the Korea Exchange, on the previous day (the 25th), VKOSPI rose 22.3% from the day before, reaching 26.26.

In this context, the KOSPI is moving sideways. As of 12 PM, the KOSPI rose 4.47 points from yesterday to 2,724.86 points, and the KOSDAQ increased by 6.12 points to 895.56 points. Last night, the New York stock market showed a decline ahead of the FOMC regular meeting.

As a result, among individual investors, there are concerned voices wondering whether even LG EnSol, which led the subscription boom, might be negatively affected by the market.

A company employee in his 30s who was allocated two shares of LG EnSol said, "There is a group chat where investors gather, and for now, we just hope it doesn't go below the public offering price," adding, "This is literally the worst-case scenario." He continued, "At first, there was talk about double and triple opening price gains, but now the mood is like this."

Kim, a self-employed person in his 40s, also said, "I just hope I don't lose money," adding, "If I see profits, I plan to sell immediately and exit." He added, "I'm a bit stressed about whether the stock price will go up or down."

Amid ongoing anxiety among small shareholders, there is also good news. LG EnSol has the possibility of early inclusion in major indices such as KOSPI 200, Financial Times Stock Exchange (FTSE), and Morgan Stanley Capital International (MSCI) after listing. This could lead to additional capital inflows.

Passive funds that track these indices will need to include LG EnSol starting from February. Passive funds are funds that hold stocks composing a specific stock index to pursue returns equivalent to the index's rise. The expected passive inflow when LG EnSol is included in these indices is estimated to be between KRW 1 trillion and KRW 1.5 trillion.

Meanwhile, on the 26th, securities firms presented LG EnSol's fair stock price ranging from a minimum of KRW 390,000 to a maximum of KRW 600,000. Korea Investment & Securities stated LG EnSol's fair market capitalization at KRW 140 trillion and target price at KRW 600,000. SK Securities forecasted a fair market cap of KRW 100 trillion and a target price of KRW 430,000. Yuanta Securities suggested a fair price range of KRW 390,000 to KRW 510,000.