LG CNS, one of the leading digital service firms in South Korea, has set its initial public offering (IPO) price at 61,900 won ($43.50), captivating attention as subscriptions for retail investors are set to open soon. This offering price, which is the highest limit of its proposed range, is expected to raise approximately 1.2 trillion won ($823.55 million) as the company aims to expand its operations significantly.
The IPO process has seen enthusiastic participation, with 2,059 institutional investors actively involved during the book-building period. According to reports, the total amount of money proposed during this phase reached a staggering 76 trillion won, with nearly 99 percent of bids exceeding the final offering price. This notable interest indicates strong confidence among investors about LG CNS’s potential for growth and its pivotal role within the technology sector.
Scheduled until January 22, 2024, subscriptions for retail investors will allow individuals living in Korea to invest through various online platforms offered by KB Securities, which is also promoting the "2025 Public Offering Stock Super Week" event. Engaging with retail investors, the event features coupon giveaways for those who subscribe for public offering shares and complete other trading activities during the promotional period. Son Hee-jae, head of KB Securities' digital business group, expressed, "We have prepared a special event for online subscribers. We will continue to introduce various digital financial services..." emphasizing the aims of customer convenience and satisfaction.
CEO Hyun Shin-gyoon, during the IPO announcement, reflected on the company’s growth, highlighting LG CNS's successful transition from traditional digital service offerings to advanced solutions including cloud computing, AI, and digital transformation services. Since 2020, LG CNS has seen its revenues soar from 3.36 trillion won to 5.6 trillion won, alongside impressive operating profits. From January to September of the previous year alone, the company accrued 3.54 trillion won, demonstrating its significant market capabilities.
Despite the optimism, some investors remain cautious due to the structure of the IPO, with 50 percent of the shares being existing shares held by Macquarie Private Equity through Chrystal Korea—a move reminiscent of previous IPOs such as HD Hyundai Marine Solution, which similarly faced skepticism due to high existing share offerings. Concerns linger about whether this structure primarily benefits existing investors rather than encouraging long-term investment by newcomers.
To assuage these worries, both LG Corp. (the largest shareholder) and Chrystal Korea have agreed to lock up 67.51 percent of all LG CNS shares for six months post-IPO, aiming to stabilize the share price amid trading volatility. The market will be watching closely to see how this strategy affects investor confidence and initial stock performance as LG CNS debuts on the market.
The global push for digital transformation and AI integration keeps LG CNS at the forefront, and its recent collaboration with Bear Robotics demonstrates its commitment to advancing logistics automation through technology innovation. Analyst Eom Su-jin from Hanwha Securities remarked on the appealing nature of LG CNS, stating, "The company’s business portfolio is extending from supporting digital transformation to AI transformation," pointing to its solid revenue growth and operating margins.
Looking forward, LG CNS aims to not only solidify its position domestically but also expand its footprint globally by taking advantage of technological advancements and engaging with new market opportunities. CEO Hyun expressed gratitude to institutional investors, noting, "Through this IPO, we aim to boost our technological capabilities and aggressively broaden our global operations to seize leadership within the global AI transformation market."