Industrial hydrogen specialist Deokyang Energen unveiled its growth strategy ahead of its KOSDAQ debut. It showed confidence in growth by announcing plans to enter the clean hydrogen business along with participation in the Shaheen Project, which is introducing the world's first process.
On the 15th, Deokyang Energen CEO Kim Gicheol said at a press briefing in Yeouido, Yeongdeungpo-gu, Seoul, "The hydrogen industry has very high entry barriers, making it difficult for new corporations to enter," adding, "Deokyang Energen is confident of a quantum jump in performance by leveraging its established position to secure differentiated feedstock, long-term contracts with top-tier clients, and infrastructure."
Deokyang Energen runs a business that spans the entire cycle of industrial hydrogen production, storage and supply. Its core is producing high-purity industrial hydrogen using hydrogen from refining and petrochemical processes. Deokyang Energen holds a solid position in hydrogen production through refining processes, particularly in the upstream refining sector.
Kim said, "When corporations that use hydrogen choose a supplier, the most important factor is 'supply stability,'" explaining, "With policies advancing to cut output in petrochemical processes recently, the upstream refining process has strengths in feedstock supply stability."
Deokyang Energen is currently participating in the Shaheen Project being promoted by S-Oil. The Shaheen Project aims to produce petrochemical products directly from crude oil based on the "TC2C process." Bypassing the refining process and going straight to petrochemicals can significantly lower production costs.
Deokyang Energen was selected in May 2023 as the company in charge of supplying hydrogen for the Shaheen Project and is currently building a plant in Ulsan.
Kim said, "We currently have plants in Gunsan and Yeosu, and we plan to start operating a hydrogen production plant and shipping center in Ulsan by the end of this year," adding, "We expect to be able to cover a nationwide supply network from the Seoul metropolitan area to Honam and the Gyeongnam region."
Deokyang Energen expressed confidence in future earnings growth based on solid results from the Shaheen Project and the existing industrial hydrogen market. It also declared entry into the clean hydrogen production business, pointing to it as a future growth engine.
Clean hydrogen refers to hydrogen produced using electricity generated from renewable energy such as wind and solar. Generally, hydrogen is obtained by electrolyzing water, but commercialization remains difficult due to efficiency issues. However, using ammonia can not only improve hydrogen production efficiency but also solve storage and transportation challenges.
Kim said, "The process of producing hydrogen from liquefied natural gas (LNG) and the ammonia cracking process are very similar, and we plan to enter with our technical capabilities."
Deokyang Energen is preparing to list on the KOSDAQ market on the 30th. The number of public offering shares is 7.5 million. The desired offering price is 8,500 won to 10,000 won, implying an offering size of 63.7 billion won to 75.0 billion won.
The offering price will be finalized through demand forecasting for institutional investors through the 16th. After that, general subscriptions are scheduled for two days from the 20th to the 21st. The lead underwriters are NH Investment & Securities and Mirae Asset Securities.