[IPO] Sungil HiTech "Expanding Secondary Battery Recycling Plant... Targeting 500 Billion KRW Sales by 2025"

Lee Kang-myung, CEO of Sungil High-Tech, is introducing the company at a press conference held on the 7th in Yeouido, Seoul. / Photo by Jang Hyowon

[Asia Economy Reporter Jang Hyowon] “With the expansion of the secondary battery recycling plant, we will achieve sales of 500 billion KRW by 2025.”

On the 7th, Kangmyung Lee, CEO of Sungil Hightech, held a press conference in Yeouido, Seoul, ahead of the KOSDAQ listing, stating, “By constructing the Hydro Center Plant 3 with the public offering funds, we can additionally produce 10,000 tons annually based on cobalt and nickel,” he said.

Founded in 2000, Sungil Hightech is a specialized secondary battery recycling company that extracts valuable metals from secondary batteries used in electric vehicles, mobile phones, laptops, energy storage systems (ESS), and power tools. It is the only company in Korea equipped with an integrated secondary battery recycling process and has advanced wet smelting technology.

The company produces five major materials of secondary batteries: cobalt sulfate, lithium carbonate, nickel sulfate, manganese sulfate, and copper. As of the end of last year, the sales composition by product was 49% cobalt, 39% nickel, 6% lithium, 4% copper, 1% manganese, and 1% others.

According to market research firm SNE Research, global electric vehicle demand is expected to grow at an average annual rate of 28%, from 9.87 million units this year to 59 million units by 2030. Consequently, the demand for raw materials for secondary batteries, a key component, is also surging, but supply instability is increasing the need for battery recycling.

Sungil Hightech has secured large-scale production capacity by continuously establishing global bases to enable flexible raw material procurement. It has also formed a strong network with major global automakers, battery manufacturers, and material companies to secure a stable supply chain.

On a consolidated basis, Sungil Hightech’s sales last year were 147.2 billion KRW, a 123% increase from 65.9 billion KRW the previous year. Operating profit also turned positive. In the first quarter of this year, the company recorded sales of 51.5 billion KRW and operating profit of 10 billion KRW, maintaining solid performance.

However, due to the nature of Sungil Hightech’s products, sales may fluctuate depending on raw material price changes. If prices of cobalt and nickel fall, product prices decrease, leading to reduced sales and inventory valuation losses. Conversely, if raw material prices rise, sales increase. In fact, cobalt prices surged last year after the COVID-19 pandemic, contributing to Sungil Hightech’s sales growth.

CEO Kangmyung Lee said, “Although product prices fluctuate, profit margins range between 7% and 15%, and we are striving to procure raw materials cheaply through direct purchasing.” He added, “For the new Plant 3, we will realize economies of scale by equipping large-scale automated facilities to minimize profit margin fluctuations caused by price changes.”

Sungil Hightech plans to raise approximately 108.7 billion KRW through this public offering. The funds will be used to build Plant 3 in the Saemangeum area, capable of producing 10,000 tons annually based on cobalt and nickel. Currently, Sungil Hightech’s production capacity is about 4,400 tons from Plants 1 and 2.

Additionally, after listing, the company plans to launch new products such as nickel-cobalt (NC) solutions next year, lithium hydroxide in 2024, and high-purity copper metal in 2026 to secure growth engines. In the recovery area, it plans to expand beyond cathode materials to include anode materials and electrolytes.

CEO Lee stated, “We are promoting strengthening global eco-friendly technology leadership, advancing battery recycling technology, and significantly expanding battery recycling material production capacity in line with the rapidly growing electric vehicle market.” He added, “Based on this KOSDAQ listing, we will leap forward as a global top-tier secondary battery recycling specialized company.”

Meanwhile, Sungil Hightech’s public offering shares total 2.67 million shares, with a desired price band of 40,700 to 47,500 KRW per share. Demand forecasting will be conducted on the 11th and 12th to finalize the offering price, followed by a general subscription on the 18th and 19th. The listing is scheduled for the end of this month, with KB Securities and Daishin Securities as lead underwriters and Samsung Securities as the managing underwriter.