'GM Bolt Recall' LG Chem, Will It Become the Leading Secondary Battery Stock Next Week?

Following an 11% plunge the previous day, Samsung SDI takes the lead during trading
Foreigners make the largest Samsung SDI purchases this month
Intense battle expected for market cap position

[Asia Economy Reporter Song Hwajeong] LG Chem is facing the prospect of losing its position as the leading stock in the secondary battery sector as its stock price plummeted due to the GM Bolt recall impact. With Samsung SDI closing in closely, the early trading session saw Samsung SDI surpass LG Chem, indicating that the competition for the top spot between the two companies is expected to be fierce for the time being.

As of 9:15 a.m. on the 24th, LG Chem was trading at 795,000 KRW, down 3,000 KRW (0.38%) from the previous day. Samsung SDI recorded 808,000 KRW, up 10,000 KRW (1.25%). Early in the session, LG Chem fell more than 3%, temporarily losing its 6th place in market capitalization to Samsung SDI, but it recovered its position by reducing the decline. The market cap gap is only about 530 billion KRW, making it a situation that could be reversed at any time.

LG Chem, the leading stock in the secondary battery sector, saw its stock price plunge more than 11% the previous day due to the GM Bolt recall. Its market capitalization evaporated by 7 trillion KRW in just one day. Consequently, the market cap gap with Samsung SDI, which was over 10 trillion KRW on the 20th, narrowed to about 2 trillion KRW the previous day. Although Samsung SDI's stock price declined last week amid a generally weak stock market, it rose 7.7% from the beginning of this month until the previous day. Foreign investors, who had been leading the decline in the domestic stock market with continuous selling, have been net buyers of Samsung SDI for 12 consecutive trading days. Foreign investors have net purchased 617.8 billion KRW worth of Samsung SDI this month, the highest amount. They have also been net buyers of LG Chem for 9 consecutive trading days but sold 285.8 billion KRW worth the previous day, marking the largest sell-off.

On the 20th, GM announced an expansion of the recall target for its electric vehicle, the Bolt. The number of recalled vehicles increased by 73,000 units from the original 60,900, bringing the total to 142,000 units. Accordingly, GM's recall costs are expected to rise from 800 million USD (approximately 940 billion KRW) to 1.8 billion USD (approximately 2.11 trillion KRW). Hyunryul Cho, a researcher at Samsung Securities, analyzed, "Referring to the Hyundai Kona recall case, it is estimated that LG Group will bear about 50-65% of the 2.11 trillion KRW recognized by GM. Since the U.S. battery pack facility was transferred to LG Energy Solution in October last year, assuming a conservative final share of 40% within the group, LG Energy Solution's final cost will be between 423 billion and 555 billion KRW." Samsung Securities lowered LG Chem's target stock price by 5%, from 1.1 million KRW to 1.05 million KRW, considering the re-emergence of battery fire risks.

However, there are opinions that this situation should not be overinterpreted. Dongjin Kang, a researcher at Hyundai Motor Securities, said, "Although the process of resolving uncertainties such as future cost-sharing ratios is expected, it is judged that LG Chem is proactively experiencing risks as a market-leading company. It is believed that the risk will be reduced through future technology development that can improve materials and safety, so there is no need for overinterpretation."

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