KOSPI Market Cap Battle Remains Fierce in July... Third and Fifth Spots Continue to Change Hands

Third and Fifth Place Change Hands Daily
LG Energy Solution and Samsung Biologics Compete for Third
KB Financial Group and Hyundai Motor Battle for Fifth

The competition for the top spots in the KOSPI market capitalization rankings remains fierce this month. While last month saw intense rivalry for the fifth position, this month the battle has expanded to include both the third and fifth places, with companies continuing to vie for higher rankings.

According to the Korea Exchange on July 8, LG Energy Solution closed at 315,000 won on the previous day, up 1.45%, reclaiming the third spot in market capitalization. This came just one day after it had ceded the position to Samsung Biologics. Since July 2, the company holding the third position has changed daily. On odd-numbered days, LG Energy Solution has taken third place, while on even-numbered days, Samsung Biologics has regained the spot. As of the previous day's closing price, LG Energy Solution's market capitalization stood at 73.71 trillion won, while Samsung Biologics was at 73.238 trillion won, a difference of 472 billion won between the two stocks.

Attention is now focused on whether LG Energy Solution, having reclaimed third place, can solidify its position without losing it again. The company's improved second-quarter earnings are expected to support its strong stock performance. On the previous day, LG Energy Solution announced preliminary second-quarter results, reporting sales of 5.5654 trillion won and operating profit of 492.2 billion won. Compared to the same period last year, sales decreased by 9.7%, but operating profit increased by 152%. This performance exceeded securities firms' forecasts. According to financial information provider FnGuide, the consensus for LG Energy Solution's second-quarter results was sales of 5.733 trillion won and operating profit of 315 billion won. Notably, operating profit excluding subsidies from the U.S. Inflation Reduction Act (IRA) was 1.4 billion won, marking a return to profitability after six quarters.

Cho Hyunryul, a researcher at Samsung Securities, explained, "LG Energy Solution's second-quarter results significantly exceeded both the consensus and our estimate of 313.9 billion won, driven by inventory accumulation demand from General Motors (GM) and improved profitability in the energy storage system (ESS) segment." However, there are concerns about a potential decline in electric vehicle demand in the second half of the year due to the expiration of the U.S. EV tax credit. Cho noted, "With President Donald Trump's signing of the 'One Big Beautiful Bill (OBBBA),' there have been changes to IRA policies. For ESS batteries, there are no changes to the local production requirements or the investment tax credit (ITC) deadlines, which is positive for LG Energy Solution as it has local production facilities. However, as EV purchase subsidies will end starting in the fourth quarter, the increased cost burden for client companies such as GM and Honda, which have been major beneficiaries of IRA subsidies, is expected to outweigh the benefits for the ESS segment." He added, "Given that inventory accumulation likely occurred in the second quarter ahead of the subsidy expiration, the possibility of weaker demand in the second half of the year is increasing."

The competition for fifth place has also shifted somewhat from last month. While several contenders were in the running last month, the race this month has narrowed to KB Financial Group and Hyundai Motor. As with the third position, since July 2, KB Financial Group has taken fifth place on odd-numbered days, while Hyundai Motor has claimed it on even-numbered days, with the two companies continuing to swap positions. As of the previous day's closing price, KB Financial Group's market capitalization stood at 43.6393 trillion won, while Hyundai Motor was at 42.692 trillion won, a difference of 947.3 billion won.

Considering the surrounding conditions, KB Financial Group appears to have a slight advantage. The stock prices of financial holding companies have been strong recently, buoyed by expectations for new government policies. In contrast, Hyundai Motor is facing renewed tariff risks as the mutual tariff suspension has expired, making it necessary to monitor the progress of tariff negotiations. Lee Jaeil, a researcher at Eugene Investment & Securities, stated, "Hyundai Motor's second-quarter results are expected to fall short of market expectations, but the impact on the stock price should be limited, as the potential for increased short-term earnings volatility due to tariff imposition is already well known." He added, "The tariff rate determined after July 7, when the mutual tariff suspension ends, and the possibility of a subsequent reduction through negotiations will be more significant factors for the stock price."