Korea’s rechargeable battery materials stocks fly high amid green shift

2021.07.19 14:06:33 | 2021.07.19 14:22:39

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Rechargeable battery materials makers have been the hottest stocks in South Korea in July, mainly driving the recent green rally in the country thanks to the world’s rapid shift toward eco-friendly energy sources.

The KRX Secondary Battery K-New Deal index, tracking shares of the country’s major electric vehicle battery makers and rechargeable battery materials makers, gained 6.39 percent in a month, according to stock exchange operator the Korea Exchange on Sunday.

The index has outperformed both the main bourse Kospi and secondary Kosdaq, which added 0.56 percent and 5.48 percent, respectively, in the same period.

Battery materials stocks have been the main driver of the recent rally versus last year when battery maker stocks led the growth.

Shares of EcoPro BM Co. jumped 41.36 percent, Chunbo Co. 32.07 percent, L&F Co. 29.42 percent, SKC Ltd 19.57 percent, and Posco Chemical Co. 13.79 percent in a month.

Investors have welcomed the battery materials markers’ aggressive investment to ramp up production and win more contracts, observed Jung Yong-jin, an analyst at Shinhan Investment.

Investors’ demand is especially strong for cathode materials makers L&F and EcoPro BM. Foreign investors net bought 148.5 billion won ($129.6 million) worth shares of L&F and 46.2 billion won worth in EcoPro BM, placing the two as No. 1 and No. 3 most-purchased Kosdaq stocks by foreigners so far this month.

EcoPro BM, especially, has been aggressive in expanding its business. It has teamed up with EV battery maker Samsung SDI Co. to produce cathode materials from their joint venture EcoPro EM. Their JV is to start commercial production in the first quarter of 2022. EcoPro BM earlier this month announced it will issue 400 billion won in new shares for investment in the new unit.

Anode materials maker Daejoo Electronic Materials Co. is also under the limelight. The company already succeeded in applying its silicon-based anode materials in LG Chem Ltd.’s pouch batteries, noted Kim Jong-min, a Samsung Securities analyst. The company plans to ramp up its monthly output from current 40 tons to 150 tons by 2022, Kim added.

Chunbo, electrolytes manufacturer, is also working to quadruple its electrolytes production capacity to 20,000 tons by 2026, while increasing investment in F derivatives (LiFSI), advanced electrolyte additives used in high-power batteries whose demand is set to surge. The rechargeable battery makers are anticipated to expand their use of the advanced electrolyte additives to 100 percent from the current 10 percent, said Lee Hyuk-jin of Samsung Securities.

By Kim Ki-chul and Cho Jeehyun

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