[Featured Stock] LG Energy Solution Hits New Low... Short Selling Concerns Rise Amid KOSPI 200 Inclusion

[Asia Economy Reporter Kwon Jae-hee] LG Energy Solution recorded a new low in the early trading session on the 11th, the day it was included in the KOSPI 200 index.

It is analyzed that the stock price is being pulled down due to institutional investors who preemptively purchased a large volume of shares ahead of the index inclusion taking profits, increased selling pressure amid short-selling concerns, and profitability deterioration caused by rising raw material prices.

As of 9:43 a.m. on the 11th, LG Energy Solution was trading at 399,000 KRW on the Korea Exchange, down 4.43% from the previous trading day. Since its listing on January 27, this is the first time the stock price has fallen below 400,000 KRW.

LG Energy Solution is being specially included in the KOSPI 200 and KRX K-New Deal indices due to stock changes on this day. Ahead of this, domestic institutional investors purchased shares worth 128.7 billion KRW the day before. Domestic institutions have net purchased approximately 180 billion KRW worth of LG Energy Solution shares so far this month.

With the inclusion in the KOSPI 200, short selling of LG Energy Solution became possible starting this day. According to the Korea Financial Investment Association, the loan balance of LG Energy Solution shares has accumulated to 1.046 trillion KRW. Typically, the loan balance is recognized as a leading indicator of short selling.

The geopolitical crisis has caused a sharp rise in prices of key battery materials such as nickel, increasing cost burdens, which is also cited as a factor pulling down the stock price.

Accordingly, SK Securities downgraded LG Energy Solution to a "Neutral" investment rating. Yoon Hyuk-jin, a researcher at SK Securities, analyzed, "As the prices of secondary battery materials rise, LG Energy Solution's profitability is deteriorating," adding, "This year, cost burdens due to rising material prices are expected rather than growth, so the investment rating is downgraded to Neutral."

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