S.Korea’s LG Energy Solution expects its global market share to overtake rival CATL’s – EQ Mag Pro

SEOUL : Days before pricing its $10.7 billion IPO, South Korean battery maker LG Energy Solution (LGES) forecast its market share would overtake main rival CATL thanks to its wider range of customers and said it was aiming for a double-digit operating margin.

LGES Chief Executive Officer Kwon Young Soo told reporters that he expected the company’s market share to overtake that of Chinese rival Contemporary Amperex Technology Co Ltd (CATL) (300750.SZ), without specifying a time-frame, because it had a wider range of customers and CATL only currently operated factories in China.

Kwon also said the company aimed to achieve double-digit operating margins by reducing material and overhead costs — addressing a profitability issue raised by institutional investors during the IPO roadshow, which kicked off last week. He did not specify by when LGES aimed to achieve this.

“We have a wider range of customers not only limited in China, but also in the United States as well as in Europe, while CATL’s growth has been mostly backed by Chinese automakers,” Kwon said at a news conference on Monday.

Analysts noted that ongoing U.S.-China trade tensions present challenges for Chinese battery makers hoping to expand their presence outside of the domestic market.

The news conference was held as LGES is preparing for an initial public offering this month and is expected to announce the pricing of its IPO this Friday.

LGES is LG Chem Ltd’s (051910.KS) wholly owned battery subsidiary and supplies electric vehicle (EV) batteries to Tesla Inc (TSLA.O) and General Motors Co (GM.N) among others.

Last week, LGES opened the books to investors to raise up to $10.8 billion in the country’s largest IPO, according to a term sheet seen by Reuters.

Source : reuters