December 22, 2024

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LG CNS headquarters in southwestern Seoul (LG CNS)

South Korean IT solutions provider LG CNS said Friday it has submitted a prospectus to the financial authorities to officially begin the public offering process, aiming for a listing on the country’s main bourse Kospi in February.

The company plans to issue 19.38 million shares in the upcoming IPO. The target offering price is between 53,700 won and 61,900 won ($37.88-$43.44) a share, with the estimated market capitalization expected at up to 6 trillion won.

LG CNS will conduct a book-building process for institutional investors from Jan. 9 to 15 and general subscriptions for public offering shares for two days until Jan. 22. The lead underwriters for the IPO are KB Securities, Bank of America and Morgan Stanley.

The IT solutions provider said it plans to use the funds from the IPO to strengthen its key capabilities and invest in future growth within digital transformation areas such as artificial intelligence, cloud and smart factories.

“Based on nearly 40 years of accumulated IT expertise, LG CNS has grown as a digital business innovator, transforming our customers’ business value. Through the IPO, we aim to advance as a global DX specialized company, leveraging our differentiated technologies in AI and cloud,” said LG CNS CEO Hyun Shin-gyoon.

Market experts forecast that LG CNS' IPO will likely be smooth based on its solid performance.

The company reported cumulative sales of 3.96 trillion won and operating profit of 312.8 billion won for the first three quarters this year. The figures went up by 7 percent on-year and 17.5 percent, respectively.

It is also expected to set a new record for annual revenue for the sixth consecutive year. In 2023, revenue reached 5.61 trillion won, a 13 percent increase from a year earlier, while operating profit grew by 20 percent on-year to 464 billion won.

LG CNS' non-affiliate revenue accounts for about 40 percent, well above the industry average of 15 percent. By shifting away from traditional IT services and focusing on AI and cloud-based solutions, the company has expanded its growth drivers and strengthened its competitiveness, leading to continued growth in its performance.

“LG CNS has a business structure that offers both stability and growth potential. … Projects such as enterprise resource planning systems for affiliates are likely to continue within the affiliate network,” said Kim Jang-won, an analyst at BNK Securities.

The largest shareholder of LG CNS is LG Corp., holding a 49.95 percent stake, while LG Group Chairman Koo Kwang-mo owns about 1.12 percent of the company, making LG CNS the only LG affiliate in which he has a personal stake.

By Jie Ye-eun (yeeun@heraldcorp.com)