Foreigners and institutions are both selling their shares at the same time
The stock of companies like LGES and Samsung SDI faced a decline in value
The focus of investors is on semiconductors and AI stocks
The underperformance of the market leader, Tesla, and the ‘chicken game’ of electric vehicles have caused domestic secondary battery stocks to decline.
According to the Korea Exchange on the 23rd, in the stock market on this day, most secondary battery companies, including LG Energy Solution (373220), which fell 2.25%, POSCO Holdings (005490) (-0.89%), Samsung SDI (006400) (-3.44%), LG Chem (051910) (-1.59%), POSCO FutureM (003670) (-0.72%), SK Innovation (096770) (-1.99%), POSCO DX (022100) (-2.05%), and EcoPro BM (247540) (-2.71%), fell more significantly than the KOSDAQ index (-0.24%). The KRX Secondary Battery Top 10 Index, composed of 10 major domestic secondary battery companies, also fell by 2.43%.
Foreign and institutional investors, in particular, led the sell-off of secondary battery stocks, pulling down their prices. Foreigners sold off Samsung SDI, EcoPro BM, LG Chem, POSCO Holdings, and POSCO FutureM for 25 billion won ($22 million), 15.5 billion won ($13.7 million), 12.4 billion won ($10.9 million), 11.8 billion won ($10.4 million), and 9.5 billion won ($8.4 million), respectively. Institutions also sold off LG Chem and POSCO FutureM for 7.8 billion won ($6.9 million) and 5.6 billion won ($4.9 million), respectively.
The reason for the slump in secondary battery-related stocks was, of course, Tesla. On the 22nd (local time), Tesla hit a 15-month low of $142.05, the lowest since January 20 last year ($133.42), which was a direct hit.
Tesla’s inability to resist the price-cutting trend of Chinese electric car companies and its participation in the bleeding competition were significant negatives for domestic secondary battery stocks.
Experts predicted that as the electric car market approaches a so-called chicken game, it would be difficult for the domestic secondary battery industry to rebound in the short term. The concentration of institutional and foreign buying on companies benefiting from value-up programs and the AI and semiconductor industries was also cited as a burden on secondary battery stocks. LG Energy Solution has already announced that its preliminary sales and operating profits for the first quarter have decreased by 29.9% and 75.2%, respectively, compared to last year.
Jeong Kyung Hee, a researcher at Kiwoom Securities, analyzed, “The growth of operating profits in the secondary battery industry may stagnate this year due to the negative lagging effect (profit and loss effect depending on the timing of raw material purchase and sales) caused by the slump in European electric car sales and the drop in lithium prices,” and said, “Now is the time when investment costs are increasing more than profits.”
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