Volkswagen reviews Porsche listing… Will an electric vehicle company be born with a market cap of 147 trillion won?

Input 2021.02.19 10:17

The Bloomberg news agency reported on the 18th (local time) that German Volkswagen is considering listing Porsche next year, citing officials familiar with the issue.

Reportedly, Volkswagen is currently being consulted on how it can benefit from the Porsche listing. The idea is that the funds secured through listing will be used for M&A or technology investment.

Volkswagen seems to be preparing to list Porsche for the era of electric cars. Porsche plans to convert all models except the 911 models to electric vehicles by 2030.

In an interview with Bloomberg last month, Herbert Dys, CEO of Volkswagen, expressed amazement that Tesla and other electric car makers are raking huge amounts of money in the market. Currently, Tesla’s market capitalization is 757 billion dollars (about 837 trillion won), 7 times higher than Volkswagen (90 billion euros, 109 billion dollars).

Considering the value of Porsche, Volkswagen is expected to secure considerable funding through listing. Porsche sold 181,000 cars by the third quarter of last year, achieving sales of 17.5 billion euros and operating profit of 1.9 billion euros. Volkswagen sold 6.3 million units during the same period, generating 155.5 billion euros in sales and 1.7 billion euros in operating profit.

Bloomberg Intelligence analyst Michael Dean estimates that if Porsche goes public, the market capitalization will reach 110 billion euros (approximately 1,147,158 billion won). He said that Porsche “will be an attractive stock with Ferrari’s operating margin on Tesla’s stock price,” and “listing will be a big solution to significantly boost shareholder value.”

Arnt Ellinghorst, an analyst at market research firm Bernstein Research, predicts that the value of Teican, the electric vehicle business unit, will reach 40 billion euros when listed on Porsche.

It is predicted that Volkswagen will continue to retain a significant amount of its stake even if it goes public with Porsche. In this regard, the Wall Street Journal (WSJ) said that Volkswagen is considering listing up to 25% of Porsche shares. However, he added that the listing review may not take place next year as it is still in its infancy.