LG new energy wants to “bite” Contemporary Amperex Technology Co.Limited(300750) with the help of capital power and sit in the top position of global power battery. On January 27, LG new energy was listed on the Korean stock exchange. After the opening, the share price once climbed 99%. In fact, the hot new energy vehicle market makes the capital level pay more and more attention to the power battery market. When Contemporary Amperex Technology Co.Limited(300750) has a trillion market value, battery manufacturers began to squeeze into the IPO track for better development. LG new energy, which calls for surpassing Contemporary Amperex Technology Co.Limited(300750) , will further open up financing channels and expand production capacity layout market after its successful listing.
However, industry insiders said that how to break through the Chinese market is the key for LG new energy to become the leader in the power battery industry. However, from the current expansion speed of Contemporary Amperex Technology Co.Limited(300750) , LG new energy has not left any space for LG new energy. Compared with continuously expanding production capacity, LG NEW energy should think about how to kill back the Chinese market after listing.
LG new energy officially launched
On the first day of listing, the issue price of LG new energy was 300000 won (about 1600 yuan). After the opening, the share price of LG new energy rose 99% to 598000 won. Then, the share price of LG new energy fell back to 468000 won, up 56% from the issue price. The market value had reached 112.8 trillion won (about 593.6 billion yuan).
Earlier, LG New Energy announced that it would raise about 68.3 billion yuan through initial public offering (IPO), becoming the largest IPO project in South Korea’s history. On the first day of listing, it was reported that Korean retail investors subscribed for more than 70 times the subscription scale. At the same time, the LG new energy IPO boosted the number of new accounts opened in Korea and China, and the new account data of some Korean securities companies increased by more than 200% compared with previous years.
According to public information, LG new energy is subordinate to LG Group in South Korea. It was once a business segment of LG chemistry, covering three major fields: power battery, small battery and energy storage system. After the global power battery market became increasingly hot, LG new energy was separated from LG chemistry.
As an early power battery enterprise, LG new energy has cooperative relations with many automobile groups and is considered as the biggest potential competitor of Contemporary Amperex Technology Co.Limited(300750) in the industry. According to SNE research data, in the first 11 months of last year, LG new energy’s global power battery installed capacity totaled 51.5gwh, a year-on-year increase of 90%, with a market share of 20.5%, ranking second, while Ningde ranked first with an installed capacity of 79.8gwh and a market share of 31.8%. Before this listing, Quan yingshou, CEO of LG new energy, said bluntly: “we expect to exceed Contemporary Amperex Technology Co.Limited(300750) in the global market share and become the first in the world.”
In order to seize market share faster, LG new energy is constantly exploring the market. It is reported that LG new energy plans to invest 8.85 trillion won in its battery factories in South Korea, Poland, the United States and China by 2025, increasing the production capacity by nearly twice to 400 GWH LG new energy stakeholders said that in addition to planning to develop new products and build smart factories to improve product quality and quality, the fund-raising will also be used to expand production.
Yan Jinghui, a member of the expert committee of the Automobile Circulation Association, said that the global sales of new energy vehicles are rising and the demand for power batteries is increasing. Based on this, Chinese and foreign battery manufacturers continue to expand production, trying to seize the first opportunity in the battle for market share. The expansion of production needs more financial support. LG new energy chose to go public at this time to broaden financing channels and challenge Contemporary Amperex Technology Co.Limited(300750) .
the Chinese market is the key
Continuously expand production capacity and layout, aiming at Contemporary Amperex Technology Co.Limited(300750) , but the real opportunity of LG new energy may be in China.
At present, LG new energy customers include Tesla, Renault, Hyundai, Volkswagen, GM, Volvo, Kia, etc. It is reported that the day before the listing, LG new energy and General Motors reached a cooperation, and the two sides jointly invested US $2.1 billion to set up a new power battery factory. It is not difficult to find that European and American enterprises are the “core circle” of LG new energy, and the overseas market is the main battlefield of LG new energy.
In recent years, the global new energy vehicle market has entered a period of rapid growth. Last year, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) cars in the United States was 656000, a year-on-year increase of nearly 100%; The sales volume of new energy vehicles in the European market was about 1.95 million, a year-on-year increase of 65%. However, the fastest growing market in the world is still the Chinese market. Last year, the cumulative sales of Shanxi Guoxin Energy Corporation Limited(600617) cars were 3.521 million, a year-on-year increase of 1.6 times.
Compared with LG new energy, the circle of friends of Contemporary Amperex Technology Co.Limited(300750) is more in the Chinese market. Not only are factories mostly located in China, but the batteries carried by Chinese independent brands, including joint ventures developed in China, are also mostly used in Contemporary Amperex Technology Co.Limited(300750) products.
Industry insiders said that compared with the overseas market, the demand for power batteries in the Chinese market is greater, which is also the biggest advantage for Contemporary Amperex Technology Co.Limited(300750) to occupy the top position in the global power market. Although LG new energy has cooperation with many large groups, at present, the sales volume of multinational enterprises in China’s new energy vehicle market lags behind that of Chinese local enterprises, which also reduces the popularity in China.
In addition, in order to reduce costs, the new energy vehicle market began to return to the era of lithium iron phosphate, but LG new energy had been deeply engaged in ternary lithium batteries. Although it later developed lithium iron phosphate, it gave Contemporary Amperex Technology Co.Limited(300750) the first opportunity. At present, Chinese auto enterprises have a good cooperative relationship with Contemporary Amperex Technology Co.Limited(300750) . While holding the Chinese market, Contemporary Amperex Technology Co.Limited(300750) is also exploring overseas markets and building factories overseas. Recently, Contemporary Amperex Technology Co.Limited(300750) has begun to lay out the power exchange market and provide solutions for more car enterprises, which has also become a bargaining chip for Contemporary Amperex Technology Co.Limited(300750) to negotiate with many car enterprises.
Facing the attack of competitors, LG new energy also began to find a breakthrough path. It is reported that LG new energy’s new generation of high nickel quaternary battery has been localized in Nanjing base, and LG new energy’s business in China will also enter a new stage of development. The cathode material of LG new energy’s new generation quaternary battery is nickel cobalt manganese aluminum, in which the proportion of nickel increases to 90%, which not only improves the energy density, but also increases the battery capacity, while the proportion of cobalt decreases to 5%, which can reduce the battery cost. This may become a breakthrough for LG new energy in China.
