'Renewable Energy' Fails to Gain Momentum in Bull Market... What Will Retail Investors Do?

Hanwha Solutions and CS Wind, Heavily Accumulated by Individuals, Continue to Show Weakness

[Asia Economy Reporter Oh Ju-yeon] Renewable energy-related stocks, which surged sharply last September due to the Green New Deal policy and expectations for expanded eco-friendly initiatives in the U.S. presidential election, are struggling amid the KOSPI bull market that continues to break all-time highs. While the index surpassed the 2730 level and individual stocks are successively hitting new highs, renewable energy stocks heavily accumulated by individual investors are failing to gain momentum. Representative stocks include Hanwha Solutions, CS Wind, CS Bearing, and Sinsung ENG.

According to the Korea Exchange on the 4th, among the top eight stocks most purchased by individuals over the past month from the 2nd of last month to the 3rd of this month, Hanwha Solutions is the only one not generating profits, along with inverse exchange-traded funds (ETFs). Stocks such as Samsung Electronics Preferred Shares (KRW 8.889 trillion), ranked first in net purchases by individuals, NAVER (KRW 520.3 billion) ranked third, KT&G (KRW 199.2 billion) ranked fourth, and LG Electronics (KRW 166 billion) ranked fifth participated in the rally and posted slight positive returns. However, individuals who bought KODEX 200 Futures Inverse 2X (KRW 759 billion) ranked second and KODEX Inverse (KRW 166 billion) ranked sixth are disappointed despite the rising index. Hanwha Solutions (KRW 139 billion) also recorded a negative return. The stock price, which closed at KRW 46,750 on the 2nd of last month, fell 2.46% to KRW 45,600 as of 10 a.m. on the day.

CS Wind, a leading wind power stock, saw its price drop 7.69% from the 130,000 KRW range on the 10th of last month to 120,000 KRW on the day, while CS Bearing fell 10.03% from KRW 32,900 to KRW 29,600 during the same period. Sinsung ENG, which experienced daily price fluctuations of up to 20%, also dropped 13.30% over the same period. Dongkuk S&C, which surged following the government's Green New Deal announcement in September, slid more than 24%, trading at KRW 8,330 on the day from the KRW 11,000 range.

However, some still regard renewable energy as a promising sector for next year. Despite recent price weakness, it is explained that if U.S. President-elect Joe Biden's eco-friendly election pledges materialize starting next year, the sector is expected to be a major beneficiary.

Researcher Han Kyung-rae of Daishin Securities analyzed, "In line with the global transition to renewable energy aimed at achieving carbon neutrality, mid- to long-term investments in the wind power industry are expected to continue, and global solar power demand is also anticipated to expand due to strengthened eco-friendly policies." In particular, he forecasted that solar power demand next year will reach 149 GW, a 24% increase from this year, thanks to the base effect of the COVID-19 pandemic and growth in major countries. Researcher Han added, "The previous growth forecast of around 10% is expected to expand to over 20%, enabling structural growth," and said, "If Biden's pledges are realized starting next year, domestic solar power companies are expected to benefit."