[Click eStock] "Battery Sector, Trading Ranges by Company"

Hana Securities judged that the remaining approximately two months until the second half of the year present trading opportunities by company in relation to investment strategies in the battery sector on the 25th.

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The battery sector has recently succeeded in a stock price rebound. Since the 1st of last month, the stock price increase rates of secondary battery-related companies were ▲Samsung SDI 28%, ▲POSCO Future M 26%, ▲EcoPro BM 30%, and ▲L&F 30%. Hyunsoo Kim, a researcher at Hana Securities, analyzed, "After the export weight of cathode materials declined for four consecutive months compared to the previous month, it rebounded for two consecutive months this year," adding, "The rebound in raw material prices such as lithium from their lows is also a major factor."

Researcher Kim continued, "Since the second quarter of last year, the battery sector began to face earnings shocks from major companies and forecasts of earnings declines for the following quarter," and explained, "However, in the second quarter of this year, we can expect earnings announcements without earnings decline forecasts. This is a situation where earnings growth forecasts can be expected for the first time in five quarters."

However, the earnings expectations for the second half of this year are at a very high level. Researcher Kim said, "Considering the U.S. electric vehicle sales growth rate, which remained in the low 20% range cumulatively as of February, the current earnings forecasts for major companies are somewhat burdensome," adding, "Especially considering the relaxation of exhaust emission regulations in the U.S. and Europe, it is inevitable to revise downward the electric vehicle sales plans by automakers for 2025." He also pointed out, "We should keep in mind the possibility of downward adjustments in battery production plans in the fourth quarter, which prepares for 2025 order volumes."

Researcher Kim stated, "Accordingly, it is necessary to appropriately utilize the earnings growth forecasts compared to the previous quarter that have appeared after a long time and the currently valid favorable outlook for the second half of the year," and added, "Based on the long-term production capacity forecasts presented by companies, the appropriate market capitalizations are ▲LG Energy Solution 117 trillion KRW, ▲Samsung SDI 52 trillion KRW, ▲POSCO Future M 36 trillion KRW, and ▲EcoPro BM 35 trillion KRW."

Furthermore, he added, "Considering this, we recommend selective approaches to companies with significant upside potential," and said, "There will be opportunities in electrolyte, precursor, separator, etc., which are beneficiaries of the U.S. policy to reduce dependence on Chinese supply chains, as well as in silicon anode materials entering the initial stage of technology application, and Samsung SDI equipment suppliers whose investment stance has become aggressive."