Hidden Beneficiary Stocks of the Inflation Reduction Act... Which Stock Has Risen Over 4 Times in a Month?

[Asia Economy Reporter Kwon Jae-hee] Battery recycling stocks are gaining attention as hidden beneficiaries of the United States' "Inflation Reduction Act," which centers on large-scale investments to address climate change and energy security. Adding to this, the resource security crisis caused by the Russia-Ukraine war and the European Union (EU)'s electric vehicle battery regulation proposal from last December, which mandates the use of a certain portion of recycled materials in battery raw materials, have propelled battery recycling stocks to become blue-chip stocks in the stock market.

According to the Korea Exchange on the 30th, as of 9:30 a.m., Sungil Hi-Tech was trading at 121,900 KRW, up 1.92% from the previous trading day. During the session, it reached a new high of 125,100 KRW. Sungil Hi-Tech, which debuted on the stock market on August 2nd with a public offering price of 50,000 KRW, has been steadily trending upward since. Sungil Hi-Tech is considered the leading stock among battery recycling stocks and plans to collect batteries from Samsung SDI's Hungary plant for recycling. Accordingly, the more Samsung SDI invests in its Hungary plant, the more attention Sungil Hi-Tech receives. Alongside Sungil Hi-Tech, Saevit Chem is also regarded as a representative stock in the battery recycling sector. Saevit Chem, which entered the stock market on August 9th, was trading at 147,700 KRW, up 2.71% from the previous day at the same time. During the session, it reached a new high of 152,600 KRW. Initially, Saevit Chem's expected price range was 25,000 KRW to 30,000 KRW, but the final public offering price was set at 35,000 KRW, exceeding the upper limit.

The electric vehicle battery recycling industry is gaining attention as the electric vehicle market begins to blossom. Battery prices account for 40% of the cost of electric vehicles and are a key component; thus, lowering battery prices is essential for the popularization of electric vehicles. Recycling used batteries is being spotlighted as a solution. Additionally, the strengthening of ESG (Environmental, Social, and Governance) initiatives worldwide is another reason why the battery recycling industry is bound to grow. The EU has mandated the use of recycled materials in electric vehicle production through its battery regulation proposal.

According to market research firm SNE Research, the global electric vehicle battery recycling market size is expected to grow from approximately 400 billion KRW in 2020 to 3 trillion KRW in 2025, with an average annual growth rate of 47%. It is projected to reach 12 trillion KRW by 2030 and 87 trillion KRW by 2040, with an average annual growth rate of 26% between 2025 and 2040.

Hainhwan KB Securities analyst said, "Resource security is a long-term issue due to the Russia-Ukraine war and US-China conflicts," adding, "Countries like Korea, which rely on imports for raw materials, are inevitably exposed to supply chain risks, and one of the representative efforts to hedge these risks is 'battery recycling.'"

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