C&M IPO: Three Key Points
- At an IPO press conference on Nov. 6, C&M announced plans to list on the KOSDAQ this month and expand its automotive motor technology into robotics, data centers and defense.
- According to Yonhap News’ securities report, C&M’s order backlog stood at 1.4659 trillion won at the end of the first half, approximately 6.1 times last year’s revenue.
- The IPO proceeds will fund R&D and expanded production capacity for automotive components and motors used in robotics, data centers and defense.
C&M Listing Plan: Investors Should Start With the Order Backlog
The key investment consideration for C&M’s IPO is not simply its exposure to robotics or defense, but whether its established automotive components business provides a solid foundation for developing new businesses. On Nov. 6, C&M unveiled its KOSDAQ listing plan and expansion strategy. The listing marks the beginning of its fundraising process and does not mean its new businesses are already assured of success.
C&M is a motor specialist spun off from LG Electronics’ motor division. Its major customers include LG Electronics, Hanon Systems and Hyundai Mobis, while its components are used in vehicles made by BMW, Volkswagen, Mercedes-Benz and Hyundai Motor. From 2018 through the first half of this year, the company supplied a cumulative 6.08 million motors for electric-vehicle heating and cooling systems.
A motor is a drive component that converts electrical energy into physical motion. The core of C&M’s announcement is its plan to extend automotive motor technology into actuators for robot joints, data-center cooling systems and defense propulsion systems. Investors should distinguish between the technology’s potential applications and actual supply volumes.
What the 1.4659 Trillion Won Order Backlog Says About the Business
C&M’s order backlog, primarily comprising automotive components, stood at 1.4659 trillion won at the end of the first half. That is approximately 6.1 times last year’s revenue of 238.5 billion won. Because the backlog reflects components scheduled for vehicles to be produced by customers, it primarily demonstrates the supply foundation of the existing automotive business rather than the prospects of new ventures.
Last year, C&M recorded revenue of 238.5 billion won and operating profit of 21.3 billion won, up 8.7% and 58.4%, respectively, from the previous year. First-half earnings this year included revenue of 145 billion won and operating profit of 11.4 billion won. The backlog could translate into revenue as orders are fulfilled, but the materials provided no projections for future utilization rates or margins.
Robotics, Data Centers and Defense: Separate Plans From Contracts
C&M has secured a confirmed contract in robotics. On Nov. 5, the company signed an agreement with Open Path Robotics to supply actuators for quadruped robots. An actuator combines a motor and controller to drive the movement of robot joints. The contract supports C&M’s entry into the market, but no contract value or expected future revenue was disclosed.
In data centers, C&M supplies LG Electronics with motors for cooling systems and plans to develop three additional products by next March. In defense, it aims to expand its lineup of propulsion systems combining drone motors and controllers by 2028. If new product development and lineup expansion lead to actual orders, the case for business diversification will strengthen. If timelines slip, the current investment thesis will again depend on the automotive components backlog.
C&M IPO Terms and Use of Proceeds
C&M is offering 2.95 million shares in the IPO. The indicative price range is 10,000∼13,000 won per share, implying expected proceeds of 29.5 billion∼38.35 billion won. Korea Investment & Securities is the lead underwriter.
Bookbuilding for institutional investors will run through Nov. 9, followed by retail subscriptions on Nov. 12∼13. The company aims to list on the KOSDAQ this month. While the proceeds are designated for R&D and expanded production facilities, the final offer price and exact listing date have yet to be determined.
Links to Listed Companies
- LG Electronics: It operated the motor division from which C&M originated and is now both a major customer and a buyer of motors for data-center cooling systems.
- Hanon Systems and Hyundai Mobis: Both are confirmed as major C&M customers and are important relationships when assessing the company’s automotive components supply base.
- Hyundai Motor: It is one of the vehicle brands using C&M components, which are also installed in BMW, Volkswagen and Mercedes-Benz vehicles.
Risks and Dates to Check Before the IPO
- The institutional investor bookbuilding results and final offer price have not yet been confirmed.
- The value of the Open Path Robotics supply contract and the future revenue and profitability of new businesses were not disclosed.
- Investors should distinguish between development progress and actual supply of the three new data-center cooling motor products scheduled for completion by next March.
- The expansion of the defense propulsion system lineup is a plan extending through 2028 and cannot yet be assessed on the same basis as current earnings.
The Bottom Line on C&M’s IPO
The 1.4659 trillion won automotive components order backlog underpins C&M’s IPO, while robotics, data centers and defense represent potential sources of additional value. After bookbuilding concludes on Nov. 9 and retail subscriptions take place on Nov. 12∼13, investors should review the final offering terms. Following the listing, they should monitor whether new product development and supply contracts translate into actual orders.
This article was automatically summarized and analyzed from the original news report. View the original article (Yonhap News—Securities)
