Sungeel Hitech files for IPO in Q1 2022

South Korean Sungeel Hitech, one of the world’s largest recyclers of lithium-ion batteries has filed for an IPO (initial public offering) on the KOSDAQ, the South Korean stock exchange. According to analysts the market cap is expected to come in between 190 MUSD and 350 MUSD according to the South Korean business daily Chosun Biz. Trading of the company is expected to start in Q1 2022.

Sungeel Hitech started its business in 2000 as a recycler of used electronics and has been recycling lithium-ion batteries since 2011. In 2017 the company divested the e-waste division and became a specialized lithium-ion battery recycler. Today the company is operating six pre-processing plants in South Korea, China, India, Malaysia and Hungary. The company did for long time trying to establish a plant in the US but met local opposition. Plans for a US presence are however still alive.

From the pre-processing plants the produced black mass is transported to South Korea and processed in the company’s two hydrometallurgical plants with an annual output of 4,400 tonnes of cobalt and nickel combined, and 2,000 tonnes of lithium carbonate.

Today 90% of the company’s feedstock comes from production scrap while 10% comes from end-of-life batteries. The production scrap is mainly sourced from the large South Korean battery makers’ plants in South Korea, China and Europe. End-of-life batteries are sourced from the whole world including the US, Canada, India and Australia. In 2021 the company was, alongside fellow South Korean recycler Enerma, awarded the contract to recycle the recalled batteries from Hyundai Kona and Ioniq in Europe, amounting to around 30,000 tonnes on cell level.

In 2020 the company’s turnover was 65.93 Bn won (56 MUSD) with an operating loss of 6.26 Bn won (5.3 MUSD). This year Sungeel expects revenues of 137 billion won (116.2 MUSD) with a 10% operating profit margin.

As a part of the listing the company is seeking to raise at least 120 billion won (102 MUSD) to finance a third hydrometallurgical plant with an annual output of 10,000 tonnes of cobalt and nickel.

With Sungeel Hitech going public it will be the second pure play recycling company on a major stock exchange after Li-Cycle’s debut on NYSE earlier in 2021. Its expected valuation will however trail its Canadian peer significantly. Li-Cycle’s current market cap of 2.17Bn USD is more than 8 times higher than the average expected market cap of Sungeel. Other US-based companies listed on smaller exchanges include American Battery Technology Company and American Manganese. None of these are so far operating any facilities but are yet valuated to 810MUSD and 190 MUSD respectively.