Soaring 2nd Battery Material Stocks

Foreigners' Top Net Purchase Stocks Concentrated
Faster-than-Expected Growth Anticipated in EU Electric Vehicle Market

[Asia Economy Reporter Minwoo Lee] Stocks of companies producing secondary battery materials such as electrolytes and cathode materials have been rising continuously. This reflects growing expectations as the growth rate of the European electric vehicle market, which they mainly target, is projected to exceed expectations.

According to the Korea Exchange on the 15th, foreign investors have been heavily buying secondary battery material stocks since the beginning of this month until the previous day. Among the top 10 foreign net purchases, 40% were secondary battery material manufacturers, including SK IE Technology (3rd, 127.5 billion KRW), L&F (6th, 73.3 billion KRW), EcoPro BM (8th, 45.7 billion KRW), and POSCO Chemical (9th, 44.5 billion KRW). EcoPro BM and L&F manufacture cathode materials for secondary batteries, while POSCO Chemical produces both cathode and anode materials. SK IE Technology is the world's number one producer of separators for secondary batteries.

Stock prices have also surged sharply. L&F's closing price was 93,400 KRW on the 12th but closed at 116,500 KRW the previous day, rising 24.7% over two trading days. This far outpaced the KOSPI's 0.5% increase during the same period. SK IE Technology closed higher on all but four trading days this month, rising more than 14% until the previous day. EcoPro BM also rose about 19%, from 216,500 KRW at the beginning of the month to 258,300 KRW as of 9:30 AM on the day. Considering that LG Chem, which directly manufactures secondary batteries, fell 1.2% and Samsung SDI rose only 2.2% during this period, the strong performance of secondary battery material stocks stands out.

Investor sentiment appears to have focused on the faster-than-expected expansion of electric vehicles in Europe, the main market for domestic material companies. On the 14th (local time), the European Union (EU) Commission announced 'Fit for 55,' raising the greenhouse gas emission reduction target from 37.5% to 55% compared to 1990 levels by 2030. Accordingly, the sale of internal combustion engine vehicles will be banned from 2035. The previous target for electric vehicle share was 40-50%, but this measure is expected to further increase the electric vehicle share. Byung-hwa Han, a researcher at Eugene Investment & Securities, said, "Considering the EU's target, the electric vehicle sales share in 2030 will be around 70-80%," and added, "The growth rate of domestic secondary battery material and component companies that have secured the European electric vehicle secondary battery market will accelerate."