Donghak ants’low price purchase’ as the three K-batteries stumbled

Input 2021.03.22 16:27

In the midst of the K-battery stock price falling, individual investors were found to have bought more than 1 trillion won. Although the domestic battery industry faced variables such as the self-production plan of electric vehicle batteries by automakers such as Volkswagen and the strengthening of Tesla regulations in China, individuals are not concerned about this.

According to the Korea Exchange on the 22nd, domestic battery makers, called K-Battery Triplets, ranked first and third in the stocks that individual investors net bought the most in the securities market on the 12th and 19th. LG Chem (051910)(712.4 billion won), Samsung SDI (006400)(341.4 billion won), SK innovation (096770)(322.1 billion won) in that order.

Recently, battery makers’ share prices have shown a bad trend. On the 19th, SK Innovation closed the deal at 21,500 won, down 3,000 won (1.40%) from the previous day. SK Innovation, which ended at 2425,000 won on the 12th, a week ago, fell about 12.78% over the next five trading days. During the same period, LG Chem and Samsung SDI fell 12.08% and 4.06%, respectively.

Earlier, at an official event held on the 15th (local time), Volkswagen announced plans to start using prismatic batteries in 2023, and to use prismatic batteries in 80% of electric vehicles it produces in 2030. This is to reduce the battery cost by about half.

It is evaluated that Volkswagen’s decision is more advantageous to Chinese battery makers than Korea. Batteries are divided into square, pouch, and cylindrical batteries according to their shape and function. SK Innovation and LG Energy Solutions mainly produce pouch-type batteries, while CATL in China is promoting prismatic batteries as their flagship products.

Lee Jong-won, a researcher at Sangin Securities, said, “Volkswagen submitted a petition to the International Trade Commission (ITC) in the process of infringing battery trade secret lawsuits between LG and SK.” In the end, it is possible that they chose China over Korea.

There is another bad news. According to the Wall Street Journal (WSJ), the Chinese government has banned major institutions and businesses from using Tesla electric vehicles because of national security threats. Considering that China accounts for 30% of Tesla’s global sales, it is understood that there will be no small impact on battery companies that supply Tesla such as LG Chem.

However, in the financial investment industry, the voice that excessive concerns towards the battery industry should be warned is empowering. For now, it is true that Volkswagen’s increased proportion of prismatic batteries and internalization of battery factories are negative issues for domestic companies, but there are also forecasts that the impact will not be significant in the mid to long term.

Han Sang-won Daishin Securities (003540)The researcher advised, “Even in the worst case, there is no need to worry excessively about the distant future because domestic companies can switch to prismatic production,” he advised. “It is recommended to use the current stock price correction as an opportunity to buy.”

Some pointed out that it is uncertain whether the Volkswagen plan can proceed without a hitch. Kang Dong-jin, a researcher at Hyundai Motor Securities, said, “If companies that have never made batteries do well, it is a surprise,” he said. “It is a situation that needs to be verified over time, and the domestic battery industry will steadily grow in the meantime.”

Meanwhile, as the electric vehicle market grows, global battery demand is growing faster than expected. After Tesla Battery Day in September last year, the stock price of battery makers, which declined due to short-term uncertainty, recovered again because of the steady improvement in the industry.

Han Byeong-hwa, a researcher at Eugene Investment & Securities, said, “If the electric vehicle market is in a sufficiently large state and the contrast between the companies varies according to the result of technological competition, the current stock price trend may be solidified, but it is not at all that time.” The proportion of the electric vehicle market will reach 100% over the next 20 years, and the growth rate will be the fastest over the next 10 years,” he predicted.