Noise is Opportunity... Retail Investors Flocking to Buy the Dip in Secondary Battery Stocks

LG Chem Tops Individual Net Purchases Last Week
Acquired Total of 744.3 Billion Won...Set New Daily Net Purchase Record on 16th
SK Inno and Samsung SDI Also Rank High...Seen as 'Bottom Buying' Opportunity

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] As Volkswagen's in-house battery production and lawsuits over trade secrets have emerged as negative factors, individual investors are actively buying domestic secondary battery stocks that have stalled. This is interpreted as a strategy to buy at a low price, given that the expansion of secondary battery demand is becoming a foregone conclusion.

According to the Korea Exchange on the 22nd, the top stock in net purchases by individual investors last week (15th-19th) was LG Chem. During this period, they bought a total of 744.3 billion KRW, surpassing Samsung Electronics (452.5 billion KRW) to take an overwhelming first place. On the 16th alone, net purchases reached 371.7 billion KRW, setting a new daily net purchase record for LG Chem by individuals. SK Innovation (292.3 billion KRW) and Samsung SDI (286.3 billion KRW) ranked third and fourth, respectively.

Individual investors began to flock as secondary battery stocks entered a downward trend due to negative factors stemming from Volkswagen. Earlier, on the 15th (local time), Volkswagen held a Power Day event and announced plans to establish a secondary battery production capacity of 240 gigawatt-hours (GWh) by 2030. Following this, the stock prices of leading domestic secondary battery companies fell one after another. The 'leader' LG Chem's closing price dropped about 14.1% from the 15th to the 19th. The stock price, which had been rising after winning a trade secret infringement lawsuit against SK Innovation, was suddenly broken. SK Innovation, which had been faltering due to losing the lawsuit, faced overlapping negative factors and fell about 8%. Samsung SDI also declined by about 3.6%.

Nevertheless, individual investors proceeded with buying. They judged that this decline was excessive and that the fundamentals of the secondary battery sector remain solid. There is also a learning effect. Last September, Tesla held a 'Battery Day' event and announced plans for battery price reductions through manufacturing cost cuts and large-scale internalization. In the approximately one month before this event, the combined market capitalization of the domestic secondary battery sector decreased by 11%. It fell about 5% even after the event. However, as growth potential was re-highlighted, it rose 83% until last month. Sangwon Han, a researcher at Daishin Securities, explained, "Although Volkswagen may differ from Tesla in that it is a major customer of domestic companies, the facts of high growth in downstream industry demand and a stable battery supply shortage remain unchanged," adding, "Rather than excessive concerns, this can be used as a buying opportunity."

This content was produced with the assistance of AI translation services.