“I firmly believed that rechargeable batteries should be invested continuously, believing in the competitiveness and market growth of domestic companies. But I wonder if I can keep holding it after Volkswagen Battery Day.”
This is the concern of an individual investor who is investing in the’K battery’ industry for a long time. This is because Volkswagen, a car maker, opened’Power Day’ and declared internalization of batteries following Tesla. LG Chem here(861,000 +0.47%)And SK Innovation(214,500 -0.69%)Instead of the pouch-type battery, which is the main battery of the company, he raised the shock wave by saying that he would use a prismatic battery as its main focus.
Researchers at securities companies are reacting with a mixture of positives and negatives. The stock price shook unexpectedly. Some experts say that “portfolio adjustment is inevitable”.
Changed growth formula
On the 18th, LG Chem finished the transaction at 861,000 won, a 0.47% increase. After Volkswagen’s Power Day, it fell 11.28% for two days from the 16th. LG Chem has been adjusted after recording 1.05 million won during the week on January 14th. SK Innovation also peaked at 327,500 won during the intraday on February 3rd. On that day, the transaction was closed at 214,000 won, a 0.69% drop.
Shares of LG Chem and SK Innovation showed a’dead cross’ in which the 20-day moving average line fell below the 60-day moving average line after Volkswagen Power Day. Deadcross is usually interpreted as a bear market turnover signal.
The rechargeable battery sector has already adjusted sharply as growth stocks are weak due to a surge in interest rates. There were many reactions in the securities industry, saying, “It is only an adjustment by supply and demand, but the growth potential of secondary batteries is effective.” However, after Volkswagen Power Day, voices mixed with concerns that were difficult to see before began to appear. Song Seon-jae, a researcher at Hana Financial Investment, was concerned that “the rechargeable battery industry will be sluggish for the time being.” It is pointed out that the internalization of automakers can become a trend.
The point that will influence growth
There are two main points that the securities industry sees. Whether it is accelerating internalization and who will be the winner of the battery standards war. There are many opinions that there is no need to worry too much about internalization. Park Yeon-ju, a researcher at Mirae Asset Daewoo, said, “The core of the battery is how to change the material inside rather than what case it uses.” It is a situation in which price competitiveness may weaken,” he pointed out.
There are also doubts about North Bolt’s own capabilities. Ko Jeong-woo, a researcher at NH Investment & Securities, explained that “North Bolt’s market share in Europe will increase, but it is difficult to see it as a target of competition for Korean companies until we confirm its mass production capability.”
The battery standard war has emerged as a factor that will differentiate the stock price among battery makers in the future. Samsung SDI in Korea(662,000 +3.60%), CATL·BYD of China, and Panasonic of Japan mainly produce prismatic batteries. LG Chem and SK Innovation are focusing on pouch types. The process is different for each battery type, so it is not easy to change. Lee Jae-il, a researcher at Eugene Investment & Securities, said, “There is a strong movement to establish individual battery standards such as Tesla’s cylindrical shape and Volkswagen’s square, etc.”
Must diversify investment into materials and equipment
As the change in the battery industry accelerates, the importance of diversified investment as an investor has become more important. Previously, domestic secondary battery material and equipment stocks had a large proportion of sales from specific companies. POSCO Chemical (cathode materials and cathode materials) and SKC (copper foil) are supplied to LG Chem, while Ecopro BM (positive electrode materials) and Iljin Materials (copper foil) are supplied to Samsung SDI.
However, the supply chain is expected to diversify as the market changes. This is the reason for the analysis that Volkswagen’s internalization of batteries could be a long-term good news for these companies. “It could be an opportunity for a domestic material company that is building production facilities in Europe or a component supplier supplying to North Bolt,” said Jung Seok Won, a researcher at Hi Investment & Securities. The production scale will increase.”
As investors of rechargeable batteries, there are many evaluations that the time for portfolio adjustment has come. This is because the need to increase the proportion of secondary battery material and equipment stocks and diversify the portfolio to overseas companies has increased. Solus Advanced Materials, which produces copper foil, has a factory in Hungary. There are Iljin Materials, SKC, POSCO Chemical, Ecopro BM, and Soulbrain (electrolyte) that have established or decided to promote factories in Europe.
Reporter Go Yoon-sang [email protected]