Korean battery names making headlines lately with multi-billion-dollar capex plans in the United States and fattening order book have been hot among foreign investors who had net sold over $2 billion in Korean stocks this month alone.

According to the Korea Exchange on Tuesday, offshore investors so far this month net purchased 402.8 billion won ($341.8 million) worth LG Chem shares and 133.2 billion won worth SK Innovation shares up to Tuesday. The stocks were their top picks on the Korean bourses.

This month, foreigners have net sold 2.56 trillion won worth Korean shares, more than doubling the net purchase of 1.1 trillion won worth in the entire September.

Foreign investors are cherry-picking Korean battery stocks amid soaring EV sales world-wide, analysts said. Global EV sales are estimated to have reached 670,000 units in September, gaining 22 percent on month and 87 percent on year, according to Samsung Securities and EV Volumes.

The explosive growth in EV market translates to that much need for batteries.

“The battery cell market has kept up growth in sync with the expansion of the EV market amid the global campaign for zero emissions,” said Kim Hyun-soo, an analyst at Hana Financial Investment. “The outlook for battery stocks is bright both in the short and long term.”

Korean names have been aggressive in expansion to keep ahead in the market competition.

On Monday, LG Energy Solution agreed with multinational automaker Stellantis N.V. to form a joint venture to produce battery cells and modules in the U.S. to target the fast-growing North American EV market. They are planning to invest a total 4 trillion won to establish a new battery manufacturing facility to churn out 40 GWh of EV batteries per year that can power about 600,000 units of high-performance EVs.

Samsung SDI on the following day also signed a JV MoU with Stellantis to create its first JV and production facility in the U.S.

SK Innovation, a latecomer among the three Korean majors, has been doubling down on expansion. Last month, the fifth-largest EV battery supplier in the world with a 5.4 percent market share approved a 5.1 trillion won capex for EV battery manufacturing plants in the U.S. to be built through BlueOvalSK, its joint venture with American automotive giant Ford Motor Co. When combining with Ford’s own investment, their capital injection for the project reaches total 13.10 trillion won.

In addition, LG Energy Solution last week successfully reached a settlement with GM to reimburse costs and expenses of $1.9 billion for the recall program of GM Bolt powered by its battery cells, removing uncertainty over the related issue.

How long the buying spree will continue, however, is uncertain.

Offshore investors recently have been showing a strategy of bargain hunting and profit-taking instead of going long on Korean shares, said Lee Kyung-min, an analyst at Daishin Securities, noting that foreigners in September bought 1.02 trillion won worth Samsung Electronics shares and then dumped more than 1.94 trillion won worth this month when the stock price went up.

Foreigners have also turned attention to energy stocks.

They net bought 98.1 billion won worth Hanwha Solution shares, the third-largest, and 60.1 billion won worth Korea Gas Corporation (KOGAS) shares, the sixth-largest.

By Lee Jong-hwa and Lee Ha-yeon

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