Secondary Batteries Gaining Attention as Leading Stocks

Stock Prices Surge on 4th Industrial Revolution Expectations
LG Chem and Samsung SDI Rank 6th and 7th in Market Cap
EcoPro BM Exceeds Target Price

[Asia Economy Reporter Oh Ju-yeon] As the novel coronavirus infection (COVID-19) is expected to accelerate the Fourth Industrial Revolution, the stock prices of secondary battery-related stocks continue to soar following IT and software sectors. Securities firms analyze that in the process of overcoming the economic crisis after COVID-19, led by electric vehicle expansion by automakers and environmental policies of major governments, these stocks will emerge as leading stocks driving the stock market in the future.

According to the Korea Exchange on the 26th, the stock prices of LG Chem and Samsung SDI surged this month, placing them 6th and 7th respectively in market capitalization rankings within the KOSPI market. In particular, Samsung SDI's market capitalization was 14.818 trillion KRW a year ago, ranking 22nd, but since the beginning of this year, expectations for growth in electric vehicle batteries have risen, surpassing Hyundai Motor, Shinhan Financial Group, SK Telecom, Hyundai Mobis, POSCO, and LG Household & Health Care one after another. Its market capitalization has now reached about 23.93 trillion KRW, increasing by 61.49% in one year. Its market cap ranking also soared vertically, jumping 15 places.

The stock prices of major secondary battery-related companies such as Iljin Materials and EcoPro BM also rose significantly. EcoPro BM's stock price, which was 71,100 KRW on the 4th, rose 67.93% to 119,400 KRW as of 9:40 AM on the same day, and Iljin Materials increased by 27.42% from 39,200 KRW to 49,950 KRW. Among them, EcoPro BM quickly surpassed the securities firms' target price of 94,000 KRW suggested last week and has been breaking its 52-week high records day after day. During the trading session on this day, it soared to a new high of 124,600 KRW.

The reason why secondary battery-related stocks are soaring relentlessly is not only due to the sudden factor of the 'next-generation electric vehicle battery business meeting' held between Samsung Electronics Vice Chairman Lee Jae-yong and Hyundai Motor Group Executive Vice Chairman Chung Eui-sun, but also because environmental issues highlighted after COVID-19 and Europe's carbon emission regulations have combined to emphasize growth potential from a mid- to long-term perspective.

Ko Jung-woo, a researcher at NH Investment & Securities, analyzed, "Despite COVID-19, the long-term growth trend of the electric vehicle market is expected to continue," and added, "The secondary battery market is expected to grow at an annual average growth rate exceeding 50% until 2025."