Green Stocks That Biden Has Given the Green Light To

Environmental Regulations and Clean Energy Pledges
Renewed Momentum for Eco-Friendly Stocks like Solar, Wind, and Hydrogen Vehicles

Stock Winners and Losers May Vary with US Presidential Election Poll Fluctuations

[Asia Economy Reporter Oh Ju-yeon] With the U.S. presidential election just over a month away, the widening gap in approval ratings between Democratic candidate Joe Biden and President Donald Trump has sparked growing interest in 'Biden beneficiary stocks' in the domestic stock market. In particular, since Biden has pledged to strengthen environmental regulations and focus on clean energy infrastructure, eco-friendly related stocks both domestically and internationally are showing strong performance. In Korea, related stocks that had risen thanks to the previous government's 'Green New Deal' policy appear to be gaining momentum again ahead of the U.S. election.

According to the Korea Exchange on the 6th, stocks related to eco-friendly sectors such as solar power, wind power, and hydrogen vehicles halted their sharp rise seen in early September and slid continuously until the end of the month, with some giving back all the gains made last month. However, they surged again immediately after the Chuseok holiday.

Hanwha Solutions' stock price, which had risen intraday to 52,300 KRW on the 7th of last month due to the Nikola issue, plunged 32.88% to 35,150 KRW on the 25th but surged 9.62% on the 5th of this month. This was after the Chuseok holiday during which the TV debates between Trump and Biden and Trump's COVID-19 diagnosis led to Biden taking the lead in approval ratings. CS Wind, a specialist manufacturer of wind power towers, showed strong stock performance not only due to the eco-friendly theme but also due to a series of contract wins. CS Wind recorded sales of 421.6 billion KRW and operating profit of 40.4 billion KRW in the first half of this year, with operating profit increasing by more than 50% compared to the same period last year. On the 5th, it also announced a wind tower supply contract worth 17.3 billion KRW through a public disclosure. The stock price rise following this news has been steep. Until early July, the stock price was 42,000 KRW, but by early September it had more than tripled to the 140,000 KRW range intraday. The stock price, which had surpassed 100,000 KRW following the government's Green New Deal policy announcement last month, fell to the 90,000 KRW range by the end of September but rose 7.97% on the 5th of this month and increased by 4.21% as of 10 a.m. that day.

LS and LS ELECTRIC saw their stock prices rise by 7.21% and 7.44%, respectively, compared to the 28th of last month, as the potential for offshore wind power growth was highlighted. Shinsegae ENG, Ecobio, and Dongkuk Industries also showed sharp increases of 14.53%, 10.45%, and 3.70%, respectively.

The policy differences between the two candidates are evident not only in environmental and infrastructure issues but also in foreign policy, regulations, and other areas, making it noteworthy that the fortunes of beneficiary stocks may fluctuate depending on approval rating changes right up to the election.

In foreign policy, Trump emphasizes protectionism, which could be negative for domestic export companies, whereas Biden pursues multilateralism, which could be positive for export companies. On the other hand, Biden's proposals to raise corporate and income taxes and strengthen antitrust investigations against large platform companies could pose burdens on businesses. This is particularly seen as a negative issue for IT companies.

Lee Kyung-min, a researcher at Daishin Securities, said, "Just as their political orientations differ, Trump and Biden's policies are also polar opposites," adding, "Fluctuations in approval ratings between Trump and Biden are likely to lead to portfolio adjustments and increased volatility across sectors and stocks due to their contrasting policies." He further predicted, "The next president will focus policies on economic stimulus for a considerable period," and "Fundamental recovery and momentum strengthening are expected through the first half of next year."