KOSDAQ Market Cap Competition Rekindled: Secondary Batteries VS Bio

Ecopro BM Returns as KOSDAQ Leader After 5 Trading Days
Ecopro Also Recovers 3rd Place After Falling to 4th on 30th Last Month
Market Cap Gap Narrow, Position Changes Expected to Continue
Market Outlook Diverges for Both Sectors

The competition among the top market capitalization stocks in the KOSDAQ market is becoming intense again. In the second half of the year, bio stocks showed strength and secured the position of the KOSDAQ leading stocks, but recently, secondary battery stocks have shown a recovery in stock prices and are making a move to reclaim the number one spot.

According to the Korea Exchange on the 3rd, EcoPro BM closed at 181,800 KRW, up 8.02% from the previous day, regaining the top market capitalization position. This is five trading days after losing the number one spot to Alteogen on the 27th of last month. On the 27th, Alteogen's market capitalization exceeded EcoPro BM's by about 100 billion KRW, securing the first place. On the 28th, the gap widened to 800 billion KRW, but EcoPro BM narrowed the gap afterward and succeeded in reclaiming the top spot.

At the end of last month, the rankings of 3rd and 4th places also reversed. HLB, which was 4th, overtook 3rd place EcoPro and moved up one rank. However, on the 2nd, EcoPro rose more than 5%, reclaiming the 3rd place.

EcoPro BM and EcoPro have long held the 1st and 2nd positions in KOSDAQ market capitalization, but this year, due to the continued sluggishness in the secondary battery sector, their leading positions have been threatened. EcoPro, which was 2nd, dropped to 3rd after giving up the 2nd place to Alteogen in June.

Last month, Alteogen rose by 1.27%, but EcoPro BM fell by 6.45%. During the same period, EcoPro dropped by 7.26%, and HLB rose by 11.14%, resulting in the 1st and 3rd places being overtaken by the 2nd and 4th places, respectively. However, yesterday, secondary battery stocks recorded a significant rise, regaining their positions.

It is expected that the competition for the leading KOSDAQ stocks between secondary battery stocks and bio stocks will continue fiercely for the time being. The market capitalization gap between 1st and 2nd, and between 3rd and 4th places is not large, so rankings can change at any time. Additionally, with expectations of interest rate cuts reflected, bio stocks, which have emerged as leading stocks in the second half of the year, may show a pause due to accumulated fatigue from previous rises. Secondary battery stocks have recently started to rebound.

The market outlook for the two sectors is mixed. While bio stocks are expected to continue their strong price trend, there are forecasts that the rebound of secondary battery stocks may be short-lived. Jeong Won-seok, a researcher at iM Securities, said, "Despite the trend of declining stock prices in the domestic secondary battery sector, the valuation still reflects a high premium compared to global peers due to downward revisions in mid- to long-term earnings estimates. Although a short-term rebound in secondary battery stock prices may occur temporarily due to supply and demand factors, the magnitude and duration are likely to be limited due to valuation burdens." Ju Min-woo, a researcher at NH Investment & Securities, also said, "Fundamental indicators such as electric vehicle sales, metal prices, and export figures continue to be sluggish. While mechanical rebounds due to supply and demand may occur, it is still difficult to discuss the true bottom of secondary battery stock prices."

The upward trend in bio stock prices is expected to continue. Kwon Hae-soon, a researcher at Eugene Investment & Securities, said, "The corporate value of domestic bio-pharmaceutical companies is leveling up this year. The market capitalization of the domestic bio-pharmaceutical sector, which accounted for 5% and 12% of the KOSPI and KOSDAQ market caps respectively in 2020, rose to 7% and 16% respectively as of August this year. We do not see the recent sector index rise as temporary and expect it to continue until 2025."