[IPO Spotlight] Hanju Light Metal Actively Develops Overseas Subsidiaries Following Listing

Establishment of Slovakian Production Base Early This Year... Supplying Hyundai Kia Parts
Expecting Business Expansion into Secondary Battery Components
CEO Lee Yong-jin Becomes Largest Shareholder After IPO
Current Largest Shareholder Eugene Everbest PEF Reduces Stake Through Existing Share Sales

[Asia Economy Reporter Hyungsoo Park] Hanju Light Metal, a manufacturer of ultra-lightweight aluminum parts, plans to actively utilize the funds raised through its KOSDAQ initial public offering (IPO) for electric vehicle parts production and overseas subsidiary development.

On the 24th, Hanju Light Metal announced it will offer a total of 6.5 million shares for the IPO, consisting of 4.2 million new shares and 2.3 million existing shares. The expected price range is 2,700 to 3,100 KRW per share, with a total offering amount between 17.6 billion and 20.2 billion KRW. Based on the offering price, the market capitalization is estimated between 52.5 billion and 60.3 billion KRW. Demand forecasting for institutional investors will be conducted over two days from the 12th to the 13th of next month, after which the final offering price will be determined.

Founded in 1987, Hanju Light Metal supplies lightweight parts based on aluminum casting technology to major domestic and international automakers. The company’s technology is recognized in the automotive industry, where weight reduction is essential for improving fuel efficiency, reducing emissions, and shortening braking distances. It supplies parts to Hyundai Kia Motors, Renault Korea, GM, Ford, and Nissan. As of the third quarter cumulative results this year, the company recorded sales of 175.1 billion KRW and operating profit of 7.8 billion KRW, approaching last year’s sales of 189 billion KRW and operating profit of 7.1 billion KRW.

Hyundai Motor Securities and Mirae Asset Securities, the joint lead managers, selected six comparable companies?SeAH Mechanics, Unique, Unitecno, Gooyoung Tech, Motonic, and Seojin Automotive?to determine Hanju Light Metal’s appropriate corporate value. Based on the average price-to-earnings ratio (PER) of 20.56 times for these six companies, Hanju Light Metal’s corporate value was estimated at 88.9 billion KRW. This applied the cumulative net income of 4.3 billion KRW for the first three quarters annualized over one year. The per-share value calculated by dividing by the number of listed shares is 4,572 KRW, and applying a discount rate of 32.20% to 40.95% led to the suggested offering price range.

Excluding the sale of existing shares, Hanju Light Metal will raise at least 11.3 billion KRW, investing 3.5 billion KRW to expand production capacity at its Slovakian subsidiary and 5.1 billion KRW to increase electric vehicle parts and vehicle lightweighting facilities.

Earlier this year, Hanju Light Metal became the first domestic aluminum parts company to establish a local production base in Slovakia, Europe. It supplies parts for the Kona electric vehicle (EV) of Hyundai Motor’s Czech subsidiary and the Sportage model of Kia’s Slovakian subsidiary. Near Slovakia are manufacturing plants of secondary battery companies such as Volkswagen, LG Energy Solution, Samsung SDI, and SK On, providing opportunities for business expansion.

CEO Lee Yong-jin of Hanju Light Metal said, "Based on 35 years of accumulated casting technology, Hanju Light Metal has led ultra-lightweighting in the domestic finished car market. After listing, we will strive to secure overseas local production bases and expand our customer base to become the next-generation leader in the lightweighting market."

After listing, the largest shareholder of Hanju Light Metal will change. The current largest shareholder, Eugene Evervest PEF, will sell 2.3 million of its 3.82 million shares through existing share sales. After the offering, Eugene Evervest PEF’s stake will decrease to 7.8%, and CEO Lee Yong-jin (11.7%) will become the largest shareholder. To stabilize management rights after listing, CEO Lee signed a joint holding agreement with Eugene Evervest PEF and major shareholders. The shareholders who signed the joint holding agreement will hold 50.8% of shares after the offering.