3040 Ants, Leaving Semiconductors Behind to Gather Secondary Batteries

Last Year’s Top Stocks by Age Group
Posco Holdings Ranked #1 in Purchases
Average Returns of 15-17% for Ages 30-40
Most Purchased Stocks Also Among 60+
Secondary Battery Stocks Become Market Core
Samsung Electronics and Hyundai Motor Popularity Declines

During the real estate boom, the areas mainly purchased by people in their 30s and 40s were Nodogang (Nowon, Dobong, Gangbuk). Nowon-gu, a popular area among the 30s and 40s who pulled together all their resources (Yeongkkeul), recorded the highest house price increase rate in 2021 thanks to their buying spree. So, what stocks did the younger generation pick in the stock market? Last year, the stocks most frequently added to the baskets of individual investors in their 30s and 40s were related to secondary batteries. The most purchased stock was POSCO Holdings. As demand concentrated on secondary battery stocks, which were the market leaders last year, the related stocks also showed an upward curve, resulting in an average stock investment return of 15-17% last year for the 30s and 40s who mainly bought these stocks.

On the 11th, Asia Economy analyzed the buying and selling status by age group in 2023 (January 2 to December 28) from NH Investment & Securities Big Data Center and found that people in their 30s purchased POSCO Holdings the most. POSCO Holdings ranked first as the most purchased stock across all age groups. Even those in their 60s and older, who prefer retirement and safe assets, bought POSCO Holdings the most, not Samsung Electronics.

POSCO Holdings was created in March 2022 when POSCO underwent a physical division, and its stock price began to rise with the secondary battery boom. Even teenagers, who usually buy traditional giants like Samsung Electronics under their parents' influence, bought this stock instead of Samsung Electronics. As a result, POSCO Holdings displaced Samsung Electronics and emerged as the next national stock. Fueled by this buying frenzy, the stock price rose from 276,500 KRW at the end of 2022 to an intraday high of 764,000 KRW in July last year, showing a 180% increase.

The second most purchased stock by people in their 30s was EcoPro. EcoPro became the king stock of KOSDAQ by surpassing 1.5 million KRW intraday in July last year. Considering that EcoPro's stock price was 105,600 KRW on the opening day of last year (January 2), the price soared nearly 14 times. However, as secondary battery demand weakened, the closing price on the last trading day dropped 58% from the peak to 647,000 KRW. The next most actively purchased stocks after EcoPro were EcoPro BM, LG Chem, and SK Innovation. Since the top five purchased stocks were all secondary battery stocks, it was truly a year focused on secondary battery stocks.

The top purchase list for people in their 40s was not much different from that of the 30s. The stock most picked by people in their 40s last year was POSCO Holdings, and like the 30s, they mainly bought EcoPro, EcoPro BM, and LG Chem. However, while SK Innovation ranked fifth among the 30s, POSCO Future M ranked fifth in net purchases among the 40s.

The reason secondary battery stocks received love calls from young individual investors is the expectation that domestic secondary battery companies will benefit from the detailed provisions of the U.S. Inflation Reduction Act (IRA). Improvements in earnings due to secondary battery order announcements and the expansion of the electric vehicle market also acted as positive factors.

Hong Seong-bae, PB team leader at NH Investment & Securities Seongdong WM Center, said, "Last year, with the announcement of the U.S. Inflation Reduction Act and the declaration that electric vehicles equipped with Chinese core minerals, materials, and parts would be excluded from subsidies, expectations grew that Korean companies could fill the gap left by Chinese companies." He added, "Along with this, long-term large-scale order announcements related to secondary battery materials and parts by Korean companies continued, and as these expectations materialized, stock prices rose sharply, leading to a surge in individual demand for secondary battery companies' stocks."

The stock investment return for individuals who mainly scooped up secondary battery stocks last year was 15.9%. The investment returns for those in their 30s and 40s were 16.9% and 15.3%, respectively. Considering that deposit and savings interest rates reached up to 10% last year due to high-interest competition, these figures are even more impressive.

As secondary battery stocks heated up the stock market, the popularity of large-cap stocks like Samsung Electronics, SK Hynix, and Hyundai Motor cooled relatively. Samsung Electronics, a favorite among individual investors, was consistently bought despite price declines, but last year it suffered the humiliation of being the top net sold stock. SK Hynix ranked second among the most sold stocks by people in their 30s and 40s. Last year, as the semiconductor industry worsened, the earnings of semiconductor giants Samsung Electronics and SK Hynix plummeted. Poor earnings dragged down stock prices. Regardless of generation, Samsung Electronics faced a selling spree by individuals and fell below 60,000 KRW in March last year, dropping to the 50,000 KRW range. SK Hynix's stock price fell from the 100,000 KRW range to the 70,000 KRW range. Other stocks like Samsung Electronics Preferred, Hyundai Motor, and Kia also appeared among the top net sold stocks.

However, it is questionable whether secondary battery stocks will remain the preferred stocks of the younger generation this year. Concerns about overheating in secondary battery stocks and worsening external conditions such as sluggish electric vehicle sales caused net buying to slow down as the second half of the year progressed.

Kim Hyun-soo, a researcher at Hana Securities, also predicted, "The secondary battery theme will show a weak trend in the short term," adding, "Considering factors such as electric vehicle sales volume, policy variables, and interest rates that determine the stock price trend of the secondary battery industry, stock price recovery is expected to be possible in the second half of the year."