[Click eStock] Attractive Secondary Battery Material Stocks... Chemical Sector Strong Stocks Expected to Rebound

[Asia Economy Reporter Lee Seon-ae] While the secondary battery sector recorded favorable stock returns exceeding the market average, SKC and EcoPro BM were identified as promising material stocks for future investment.

According to Daishin Securities on the 28th, the cumulative stock prices of secondary battery companies in June showed Samsung SDI +12%, SK Innovation +9%, and LG Chem +2%. For material companies, SKC +22%, EcoPro BM +21%, and Chunbo +11% were recorded. Although these figures represent favorable stock returns surpassing the market returns (KOSPI +3%, KOSDAQ +3%), it is notable that in May, the sector generally declined, underperforming the market.

Han Sang-won, a researcher at Daishin Securities, stated, "This indicates that the stock prices are beginning to reflect positive factors such as strong global electric vehicle sales, announcements of overseas expansion by Korean companies, and the establishment of joint ventures, which were previously not priced in." He emphasized, "However, unlike last year when abundant liquidity fully reflected future growth potential, the current situation requires profit growth beyond sales growth through profitability improvement."

He added, "The relative stock strength of Samsung SDI and SK Innovation is judged to reflect expectations for the electric vehicle battery business turning profitable. Among material companies, SKC (favorable copper foil supply conditions) and EcoPro BM (start of battery recycling) are representative stocks expected to improve profitability in the second half of the year."

Meanwhile, the petroleum refining sector also recorded favorable stock returns. Although the chemical sector's stock prices continue to adjust due to spread declines, the stock price increases of Hyosung Advanced Materials (+9.0%) and Hyosung TNC (+2.2%) are notable. This is attributed to the confirmation of favorable market conditions due to increased demand from global economic recovery in their main products, tire cords and spandex, respectively.

In the case of Hyosung TNC, although stock price adjustments occurred due to concerns over a spandex market downturn (peak-out), the stock price resumed an upward trend as favorable business conditions were confirmed. While pure petrochemical stocks such as Lotte Chemical and Kumho Petrochemical have shown sluggish trends due to weak spreads, this suggests that stock price rebounds are possible when spreads reverse.

Researcher Han explained, "From this perspective, it is regrettable that the spread decline continues, but the overall price increase of major chemical products can be evaluated positively." He added, "In particular, since excessive concerns about market deterioration (entry into a downcycle) have been reflected, valuations have significantly decreased, so there is also the possibility of a strong stock price rebound."

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