Yoon Seok-yeol Government's Nuclear Power Promotion
Impact of US Inflation Reduction Act
7 out of 10 Lowest Discrepancy Stocks 'Taejo Yi Bang-won'
Top is POSCO Chemical at 1.2%
Average Stock Discrepancy Rate 41.11%
Largest Stock is Lotte Tour Development
[Asia Economy Reporter Lee Myunghwan] The so-called ‘Taejo Ibangwon’ stocks?solar power, shipbuilding, secondary batteries, defense industry, and nuclear power?are gaining tremendous popularity. With expectations of benefiting from various domestic and international policies, these stocks have been on a continuous upward trend, bringing their prices close to the target prices set by securities firms. Analysts have noted that the strength of the Taejo Ibangwon stocks is not merely short-term.
According to financial information provider FnGuide on the 30th, as of the 26th, the average price deviation rate of 295 stocks with price forecasts from three or more domestic securities firms was 41.11%. The price deviation rate is an indicator that expresses the percentage difference between the average target price set by securities firms and the current stock price. A lower deviation rate indicates that the current stock price is closer to the target price.
When examining the stocks with the lowest price deviation rates, industries and expected beneficiary stocks belonging to Taejo Ibangwon generally showed low deviation rates. Among the 10 stocks with the lowest deviation rates, seven were related to secondary batteries, shipbuilding, and defense.
Posco Chemical, a secondary battery materials company, showed the lowest deviation rate at 1.20%. Posco Chemical’s average target price was 165,467 KRW, and its closing price on the 26th was 163,500 KRW, close to the target price. Other secondary and hydrogen battery-related stocks such as Korea Zinc (16.67%), Doosan Fuel Cell (17.63%), and LG Energy Solution (18.27%) also showed deviation rates more than half lower than the average. Similarly, nuclear power beneficiary stocks like Hyundai Doosan Infracore (3.50%), Taekwang (8.11%), and Sungkwang Bend (14.94%) showed low deviation rates.
Stocks related to shipbuilding also had low deviation rates. Hyundai Mipo Dockyard (1.51%), Hyundai Electric (2.02%), and Hyundai Heavy Industries (6.90%) showed minimal differences from their target prices. Defense stocks such as Hanwha Aerospace (7.05%), Hanwha Solutions (13.79%), Hyundai Wia (13.96%), and LIG Nex1 (14.22%) also had relatively low deviation rates.
The strength of these industries was also evident in the sector indices of the KOSPI market. Comparing closing prices from the 1st to the 26th of this month, the indices for non-metallic minerals (13.54%), machinery (10.77%), and steel & metals (7.21%) outperformed the KOSPI’s overall increase of 1.20%.
Securities firms analyzed that the strength of the Taejo Ibangwon stocks is not a short-term thematic phenomenon. They explained that it is influenced by policy decisions such as the U.S. Inflation Reduction Act (IRA) and the Yoon Seok-yeol administration’s promotion of the nuclear power industry. KB Securities researcher Hainhwan Ha said about the strength of Taejo Ibangwon, "It should be viewed as demand and supply driven by policy or political phenomena rather than general macroeconomic demand and supply," adding, "It is appropriate to describe it as a product of an era of investment, not a short-term thematic overheating."
Meanwhile, as of the 26th, the stock with the largest deviation rate was Lotte Tour Development. The deviation rate between Lotte Tour Development’s average target price (22,833 KRW) and current price (11,700 KRW) was 95.15%, nearly double the difference. Other stocks with high deviation rates included Enox Advanced Materials (84.58%), SD Biosensor (83.64%), Clio (78.97%), and IS Dongseo (78.91%).
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