How Far Will It Go... Leading Secondary Battery Material Stocks Rise Again

EcoPro BM and L&F, Leading 2nd Battery Cathode Material Companies, Sail Smoothly
Stock Prices Rise Over 40% This Month... Foreign Investors Continue Net Buying
Positive Market Conditions Boost Expectations for Additional Orders

[Asia Economy Reporter Minwoo Lee] The leading stocks in secondary battery materials, such as Ecopro BM and L&F, continue their strong performance. Positive industry conditions combined with major order announcements have driven their prices up by about 40% just this month, showing an unstoppable upward trend.

As of 11:04 AM on the 15th, the stock price of Ecopro BM, a secondary battery cathode material manufacturer, recorded 446,600 KRW, up 2.24% from the previous day. Following an 8.33% increase the day before, the upward trend continued into the morning. The stock closed higher for six consecutive trading days from the 7th through the previous day, with a cumulative increase exceeding 40% during this period. The stock price has surged approximately 47% since the beginning of the month. The market capitalization, which was around 6.5 trillion KRW at the start of the month, is now approaching 10 trillion KRW. L&F, another cathode material manufacturer, is also performing well. After closing up 2.6% the previous day, it rose 0.65% to 154,800 KRW as of 11:04 AM. It has increased for five consecutive trading days since the 8th, rising about 40% this month.

Foreign investors' buying momentum has also been steadily flowing in. Up to the previous day this month, L&F saw net purchases worth 116.9 billion KRW, and Ecopro BM 113.9 billion KRW. These amounts rank first and second in net foreign purchases on the KOSDAQ, respectively. Even when expanding the scope to all stocks including the KOSPI, they rank sixth and seventh, respectively.

The surge in secondary battery demand has positively influenced the outlook that cathode material companies, as key suppliers, can grow in the mid to long term. Ecopro BM has already secured a large-scale order. On the 9th, it announced that it signed a contract with SK Innovation to supply high-nickel NCM (Nickel-Cobalt-Manganese) cathode materials for electric vehicles (EVs) worth 10.1 trillion KRW from 2024 to 2026. This amount is nearly 12 times its separate financial statement sales from last year, significantly stimulating investor sentiment. On the day the contract was announced, the stock price surged more than 18% at one point compared to the previous day. On the same day, L&F also closed up 3.57% amid growing expectations for additional orders.

Hyunsoo Kim, a researcher at Hana Financial Investment, explained, "Secondary battery material companies, which have no concerns about demand peaking out, had already reached a price-to-earnings ratio (PER) of 30 times based on 2023, causing short-term valuation pressure. However, with Ecopro BM’s large order, there is now a rationale to bring forward earnings from 2024 onward."