[Special Stock] Nara M&D, LG Chem Secondary Battery Pack Supplier... LG Electronics as Second Largest Shareholder Shows Strength

[Asia Economy Reporter Hyungsoo Park] Nara M&D is showing strong performance. The expectation that the secondary battery business, prepared since 2016, will yield results seems to be influencing the stock price.

At 9:23 AM on the 22nd, Nara M&D is trading at 11,300 KRW, up 22.57% from the previous day. The recent upward trend in the stock price continues. It also rose nearly 15% the day before.

Established in 1999 by spinning off the mold factory of LG Electronics' Production Technology Center, Nara M&D specializes in manufacturing molds and parts for automobiles and home appliances. As a new business, it produces battery pack parts for electric vehicles and supplies them to LG Chem. CEO Kim Young-jo and the largest shareholder hold 14.99% of the shares, while LG Electronics owns 12.57%. CEO Kim Young-jo joined LG Electronics in 1967 and served as the head of the Production Technology Center. He is leading the battery pack business. The company is known as the largest battery pack supplier to LG Chem.

To mass-produce electric vehicle battery packs, Nara M&D established Nara Moso Technology Co., Ltd. in Nanjing, China, in June 2016. In January 2018, it established Nara Battery Engineering Poland Ltd. in Wroclaw, Poland. It trades with globally renowned automotive parts companies such as DELPHI and DENSO. It maintains a close business relationship with LG Chem, which competes for the top 1-2 positions worldwide in the electric vehicle battery sector.

Park Chansol, a researcher at SK Securities, introduced, "Nara M&D is a key battery pack supplier to LG Chem," adding, "To mainly supply battery packs and ESS parts to LG Chem, it established Nara Moso Technology Nanjing Co., Ltd. in China in 2016."

He continued, "In 2018, Nara Battery Engineering Poland Ltd. was established, and the factory began operations in November 2019," explaining, "The demand for battery pack parts at LG Chem's large-scale battery factory in Poland is expected to increase."

He stated, "Margins related to secondary batteries are expected to be formed around 9-10%," adding, "With the mass production and distribution of Volkswagen's electric vehicle ID.3, starting the expansion of the European electric vehicle market, there seems to be no issue with demand for battery packs at the Poland factory."

Lee Sangheon, a researcher at Hi Investment & Securities, explained, "Nara M&D's injection parts for electric vehicle battery packs are produced at domestic, Nanjing in China, and Poland factories and supplied to LG Chem and others," adding, "In the case of Nara Battery Engineering Poland Ltd., which is 100% invested by Nara M&D, it started supplying LG Chem's Poland corporation from the fourth quarter of last year through a dedicated line."