Last Month's Top-Performing Secondary Battery ETFs Show Poor Returns This Month
TIGER 2chaJeonji TOP10 Leverage Down 16.75%
KRX 2chaJeonji TOP10 Index, Up 7% Last Month, Falls Over 8% This Month
Reflecting Disappointment Over Tesla Robotaxi and Concerns About Q3 Earnings Weakness
Last month, lithium-ion battery exchange-traded funds (ETFs) showed signs of recovery, but they have been underperforming again this month. This is interpreted as reflecting the decline in Tesla's stock price due to disappointment over 'robotaxi' and the poor earnings outlook for the third quarter of this year. It remains to be seen whether the upcoming U.S. presidential election next month will serve as a momentum for a rebound in lithium-ion battery stocks.
According to the Korea Exchange on the 18th, since the beginning of this month, TIGER 2cha jeonji TOP10 Leverage has fallen 16.75%, recording the second worst return among all ETFs. KODEX 2cha jeonji Industry Leverage followed with a 16.61% decline, ACE Tesla Value Chain Active fell 9.41%, BNK 2cha jeonji Anode Material dropped 8.91%, TIGER 2cha jeonji Material Fn decreased 8.77%, TIGER 2cha jeonji TOP10 declined 8.64%, and KODEX 2cha jeonji Core Material 10 fell 8.61% respectively.
This is a stark contrast to last month. Last month, lithium-ion battery ETFs recorded double-digit gains and ranked among the top in returns. The KRX 2cha jeonji TOP10 index, composed of 10 major domestic lithium-ion battery companies, rose 7.40% last month, recording the highest return among exchange theme indices, but this month it has fallen more than 8%, giving back all the gains from last month.
The change in sentiment toward lithium-ion battery stocks this month is attributed to disappointment over Tesla's robotaxi and concerns about poor third-quarter earnings. Tesla unveiled a prototype of the robotaxi Cybercap, which operates autonomously, on the 10th. However, the market reaction was cold, and Tesla's stock price fell 8.78% after the announcement.
Additionally, the poor third-quarter earnings are a burden. Although LG Energy Solution posted results exceeding market expectations, overall poor earnings are anticipated. Ianna, a researcher at Yuanta Securities, said, "Only a limited number of companies are expected to improve earnings compared to the second quarter, and poor third-quarter earnings are expected." According to financial information provider FnGuide, Samsung SDI's third-quarter operating profit consensus (average securities firm forecast) is 161.3 billion KRW, down 67.48% year-on-year. POSCO Holdings is expected to decrease by 31.89% to 814.7 billion KRW. EcoPro BM's third-quarter operating profit consensus is only 300 million KRW, a 99.35% decrease compared to the same period last year.
Lee Yong-wook, a researcher at Hanwha Investment & Securities, said about Samsung SDI, "Third-quarter earnings are expected to fall short of consensus," adding, "From the third quarter, the polarizing film business unit within electronic materials will be treated as discontinued operations, but even considering this, earnings are expected to fall short of expectations. The exchange rate has declined, and shipments to BMW and Audi sharply dropped in the second quarter and have been slow to recover through the third quarter."
As the third-quarter earnings are absorbed, a sluggish stock price trend is expected for the time being, and the market is likely to focus on the U.S. presidential election next month. The rebound of lithium-ion battery stocks could be determined by the election outcome. Researcher Ianna suggested maintaining rather than reducing exposure to the lithium-ion battery sector, stating, "The reason for maintaining exposure is due to the U.S. presidential election in November," and added, "If Kamala Harris is elected, lithium-ion batteries are likely to become a leading sector."
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