All Secondary Battery Stocks the Same?…L&F Retail Investors Cry, Ecopro Retail Investors Smile

In the Last 3 Months, Individual Investors' Top Net Purchases Include Numerous Secondary Battery Stocks
LNDF Tops KOSDAQ 3-Month Net Purchases... Down -17.33% Compared to Individual Average Purchase Price
EcoPro Records 42.27%... Only POSCO Holdings and POSCO Future M Are in Profit on KOSPI

Individual investors in the domestic stock market have shown a strong affection for secondary battery stocks. Over the past three months, many listed companies included in the secondary battery value chain have ranked among the top 10 net purchases by market. This is interpreted as a result of increased interest in secondary battery stocks following the sharp rise of the EcoPro group stocks this year. As EcoPro recently drew a steep upward curve again, buying momentum has spread to relatively less-risen secondary battery-related stocks. However, there is a divergence of fortunes even within secondary battery stocks.

According to the Korea Exchange and the financial investment industry, individuals purchased EcoPro shares worth 397.6 billion KRW over the three months from April 14 to July 14. This ranks third in net purchases in the KOSDAQ market. The average purchase price was 702,169 KRW, and based on the closing price of 999,000 KRW on the 17th, the return on investment reached 42.27%.

EcoPro shares rose to as high as 1,015,000 KRW during the trading session on that day. They reached the all-time high recorded on the 10th before giving up some of the gains near the market close. Even by closing price, the stock surpassed 1 million KRW, aiming to become a "king stock," but ended trading at 999,000 KRW, just 1,000 KRW short. EcoPro’s stock price has risen 32.5% since the beginning of this month. Its market capitalization reached 26.6 trillion KRW, closely chasing its subsidiary and the largest market cap company in the KOSDAQ, EcoPro BM (27.3 trillion KRW).

EcoPro recorded sales of 2.0132 trillion KRW and operating profit of 116.4 billion KRW in the second quarter of this year. Compared to the same period last year, sales increased by 63.4%, while operating profit decreased by 2.1%. Although most securities firms avoid analyzing EcoPro, which continues to grow in scale, individual investors are continuously placing "buy" orders. This is because positive factors such as the subsidiary’s listing and inclusion in the Morgan Stanley Capital International (MSCI) Korea Index are on the horizon despite earnings falling short of market expectations.

Individuals also purchased EcoPro BM shares worth 498.5 billion KRW over the three months. The average purchase price was 265,308 KRW, resulting in an evaluation return of 5.16%. EcoPro BM achieved sales of 1.9062 trillion KRW and operating profit of 114.7 billion KRW in the second quarter. Sales and operating profit increased by 60.6% and 11.5%, respectively.

The stock most purchased by individuals in the KOSDAQ market over the past three months was L&F, with purchases totaling 536.6 billion KRW. L&F produces secondary battery materials but its stock price did not rise as much as the EcoPro group stocks. Contrary to expectations that L&F’s stock price would catch up with the EcoPro group stocks, it fell 7.2% this month. The average purchase price of individuals who bought L&F was 272,780 KRW, which is 17.33% higher than the current price. Unlike the EcoPro or POSCO group stocks, slow vertical integration of raw materials and low domestic production rates of materials are considered weaknesses. The concentration of about 80% of total sales from LG Energy Solution is also one of the reasons for the stock’s sluggish performance.

Hyuntae Kim, a researcher at BNK Investment & Securities, analyzed, "Sales in the second quarter are estimated to have fallen short of expectations as cathode material sales remained at the previous quarter’s level." He added, "The main cause of the sales slump is the contraction of demand in Europe." He continued, "The sharp rise in prices and economic downturn concerns in Europe, combined with a drop in cathode raw material prices, seem to have delayed purchasing demand. However, since the main customer, Company T, recorded sales exceeding expectations, shipments of cathode materials to the U.S. are continuously growing."

Individual investors also purchased medical AI company Lunit shares worth 295 billion KRW. Considering its market capitalization of 2.2 trillion KRW, the net purchase ratio reached 13.4%. Although it ranks fourth in net purchase size, the net purchase ratio relative to market capitalization is higher than that of secondary battery material companies. Individuals have recorded an evaluation return of over 40% from investing in Lunit. Lunit has been recognized overseas for its medical AI technology, participating in Saudi Arabia’s national strategic project "Vision 2030" and the "SEHA Virtual Hospital" project. It installed the chest X-ray AI image analysis solution "Lunit INSIGHT CXR" and the mammography AI image analysis solution "Lunit INSIGHT MMG" at the public medical virtual hospital under the Saudi Ministry of Health. Chung Hyun Kim, a researcher at Mirae Asset Securities, said, "The AI image analysis solution 'Lunit INSIGHT' has penetrated more than 2,000 medical institutions worldwide," and predicted, "External growth will continue."

Among the top 10 listed companies by individual net purchases, except for EcoPro, Lunit, and EcoPro BM, all are showing losses. Although individuals purchased more than 130 billion KRW worth of Almek shares, which was listed on the KOSDAQ market on the 30th of last month, the evaluation loss rate reached 17%. Interest in rookie stocks increased due to the expanded volatility issue on the first day of listing, but investments after listing, rather than in the public offering, have not been profitable.

Other listed companies with individual net purchases exceeding 100 billion KRW include Enchem, Studio Dragon, HLB, and Chunbo. Despite the active net buying by individuals, stock prices continue to trend downward.

In the KOSPI market, secondary battery-related companies such as POSCO Holdings, LG Chem, LG Energy Solution, SK Innovation, and POSCO Future M appeared among the top individual net purchases. Individuals purchased POSCO Holdings shares worth 1.7732 trillion KRW, recording an evaluation return of 20.5%. They also net purchased POSCO Future M shares worth 435.6 billion KRW, with an evaluation return of 11.6%.

Yujin Lee, a researcher at Eugene Investment & Securities, explained, "POSCO Holdings recently disclosed production plans for lithium, nickel, cathode materials, and anode materials through 2030." She added, "The plans include 423,000 tons of lithium, 240,000 tons of nickel, 1 million tons of cathode materials, and 370,000 tons of anode materials, expanding production capacity in all areas compared to last year." She further noted, "The lithium business value has been revised upward from 4.9 trillion KRW to 6.7 trillion KRW."

POSCO Future M is the only secondary battery material company in Korea that simultaneously produces anode and cathode materials. It is expected to continue growing according to POSCO Holdings’ strategy to expand secondary battery material production capacity. Yongwook Lee, a researcher at Hanwha Investment & Securities, forecasted, "We expect natural graphite supply contracts and the first stable production of artificial graphite in the second half of the year," and "We anticipate profitability improvement through continuous orders for cathode and anode materials and process efficiency."

Individuals net purchased LG Chem and LG Energy Solution shares worth 780.4 billion KRW and 443.7 billion KRW, respectively, over three months. The current stock prices are lower than the individual average purchase prices. In addition, they focused on buying Samsung Biologics, S-Oil, LG Household & Health Care, Kakao, and NCSoft, but are currently recording evaluation losses.

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