Second Half IPO: Everything Thrived Except Used Batteries

Seongil Hi-Tech Soars 74%, Saevitcam Surges 60% in One Month

[Image source=Yonhap News]

[Asia Economy Reporter Minji Lee] Among the newly listed stocks on the domestic stock market in the second half of the year, all except for used battery stocks have been sliding in a declining market.

On the 16th, Asia Economy reviewed the stocks that entered the domestic stock market from the 18th of last month until the day before, and found that battery recycling company Sungil Hightech recorded a 74% increase, achieving the highest performance. Despite the unfavorable global stock market environment due to interest rate hikes and recession concerns, Sungil Hightech, which started at a public offering price of 50,000 KRW on July 28, surged about 234% to 165,000 KRW. During the same period, Saevitcam, a used battery recycling company listed last month, also recorded a 60.8% gain. Compared to the public offering price (35,000 KRW), this is a 372% surge.

Among the 13 companies listed in the second half of the year (excluding SPAC mergers), except for the used battery companies Sungil Hightech and Saevitcam, most declined, with some stocks recording double-digit losses in the sharp downturn. These include ICH (-32%), April Bio (-28%), Socar (-21%), HYTC (-19%), Susan Industry (-19%), Lunit (-19%), Youngchang Chemical (-15%), Nextchip (-15%), Daesung Hightech (-6%), and Conan Technology (-1%). Based on the public offering price, the stocks with the most severe declines were ICH and Youngchang Chemical, causing losses of 48% and 32% respectively to public offering investors.

The concentrated investment sentiment in used battery stocks in this situation is due to increased interest in recycling end-of-life batteries as the electric vehicle market expands. In the secondary battery production structure, material costs account for about 60%, and 80-90% of key raw materials such as nickel, cobalt, and lithium used in this are imported, resulting in high uncertainty in material supply. Additionally, lithium carbonate supply is predicted to be insufficient in 2026.

Jinhyung Park, a researcher at Cape Investment & Securities, analyzed, "As import dependence increases, major countries are deeply discussing ways to extract materials from used batteries and recycle them domestically," adding, "With the U.S. showing its commitment to domestic production of battery materials through the Inflation Reduction Act (IRA), investment sentiment in used batteries has expanded." The global used battery market size is expected to grow from 400 billion KRW in 2020 to 8 trillion KRW by 2040. Domestically, regulatory improvements were announced on the 5th to revitalize the post-use battery industry, and a ‘Battery Alliance’ led by the industry is scheduled to launch in the first half of next year.

Meanwhile, this month, a total of 10 companies (WCP, RP Bio, Sun Bio, Model Solution, Inoruls, Top Material, OSP, SBV Tech, Neuromeka, Shaperon, etc.) are conducting demand forecasting and are expected to knock on the door of the domestic stock market. Considering that 7 companies conducted demand forecasting in July and 6 in August, this is a significant increase. However, in the previous day’s demand forecasting, institutional investors’ bids of 60,000 KRW, below the lower end of the expected public offering band of 80,000 KRW for WCP, the largest secondary battery separator manufacturer in the second half, are likely to pose a burden on subsequent companies. Eugene Hyung, a researcher at DB Financial Investment, explained, “The IPO environment is not very favorable for companies wanting to increase their public offering amount,” adding, “With increasing desires to secure investment funds and realize investment returns, some companies will have to continue worrying about fundraising even after listing.”