[Asia Economy Reporter Eunmo Koo] As governments around the world, including South Korea, introduce stimulus packages centered on the 'Green New Deal,' interest in the role of hydrogen as a means of storing renewable energy is also increasing. With the growth potential of the global hydrogen market expanding, domestic hydrogen-related companies are being evaluated as increasingly attractive investment opportunities.
According to the Korea Exchange on the 9th, the stock price of Iljin Diamond closed at 29,250 KRW, up 3.72% (1,050 KRW) from the previous trading day. Iljin Diamond reached an intraday high of 31,650 KRW, marking its highest price of the year, and has risen 25.0% since last month through the previous day. This return is more than double that of the KOSPI (12.2%) during the same period.
Besides Iljin Diamond, stocks classified as hydrogen-related in the domestic market have recently shown strong price momentum. During the same period, Doosan Fuel Cell, the leading domestic fuel cell company, posted a triple-digit increase of 108.2%, while S-Fuel Cell (18.8%), Sanga Front Tech (27.6%), and EM Korea (16.0%) also achieved high returns. Additionally, Hyundai Motor Company (20.7%), which produces hydrogen vehicles, and Sejong Industrial (21.4%), which operates in hydrogen vehicle parts, are also on the rise.
The recent strength in hydrogen-related stocks is interpreted as a result of the Green New Deal being positioned as a key pillar of the 'Korean New Deal' policy, followed by the announcement of specific budget allocation plans, which has increased expectations for future growth. On the 1st, the government announced the main goals of the Korean New Deal policy, which will invest a total of 76 trillion KRW by 2025, through the '2020 Second Half Economic Policy Direction.' Of this, 12.9 trillion KRW will be invested in the Green New Deal sector from this year through 2022. On the 3rd, the government finalized the third supplementary budget, deciding to allocate 1.4 trillion KRW to the Green New Deal within the year.
Europe’s continuously strengthening environmental policies are also positive factors. On the 3rd, the German government announced a 130 billion euro (approximately 176 trillion KRW) stimulus package to respond to the economic impact of COVID-19, planning to invest about 30 billion euros in green industries, including 11 billion euros for renewable energy electricity subsidies and 9 billion euros for green hydrogen investments.
Researcher Byunghwa Han of Eugene Investment & Securities stated, "Since most countries aim for a 100% renewable energy era, hydrogen’s role as a renewable energy storage medium is essential," adding, "This stimulus package will lead to the expansion of hydrogen infrastructure in Europe and the development of various hydrogen-related industries." He explained that the globally spreading eco-friendly policies will increase the investment appeal of domestic hydrogen-related companies, which have advanced technology in hydrogen vehicles and hydrogen fuel cell power generation.
However, since the concept of the Green New Deal is broad, it is pointed out that rather than having indiscriminate expectations and investing in related stocks, it is necessary to continuously monitor the detailed contents of the policy. Researcher Jaewon Choi of Kiwoom Securities advised, "As detailed policy contents are announced in the future, it is important to carefully examine sub-industries and specific business details that may benefit within the broader trend."
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