EcoPro BM beats Kosdaq's top market cap Celltrion

EcoPro BM Co., a leading manufacturer of cathode material for secondary batteries, topped the market capitalization for Kosdaq-listed firms on Jan. 18. The South Korean company’s stock closed at 438,300 won ($367.39), up 0.74%, hitting a market cap of 10.05 trillion won ($8.42 billion) on the day.

Celltrion Healthcare Co., embroiled in an accounting fraud scandal, saw its stock fall 1.22% to 64,600 won on the day. The Korean pharmaceutical giant, with a 10.01 trillion won market cap, slid from the top to second place on the Kosdaq for the first time.

It is the first time that Kosdaq’s top market cap company has been replaced since February 2018 when Celltrion Inc., Celltrion Healthcare's biosimilar manufacturing affiliate, transferred its stock listing from the secondary Kosdaq to the main bourse Kospi. Celltrion Healthcare has had the top market cap on the Kosdaq since then.

EcoPro BM made its public market debut with a 48,000 won offering price in March 2019. The stock price has jumped more than nine times. 

Celltrion Healthcare’s stock has plunged nearly 20% for the past three days, losing more than 2 trillion won of its market cap. The stock price dropped after Korea’s Financial Services Commission (FSC) announced on Jan. 14 that it will discuss the pharmaceutical firm’s fraud allegations, including inventories assets accounting, at an internal meeting on Jan. 19. At the time of this report, FSC withdrew the discussion plan.  

As EcoPro BM’s market cap is only about 31 billion won more than Celltrion Healthcare’s, fierce competition for the top spot will go on for a while. The company which better overcomes its set of challenges will take the top position, market watchers said.

EcoPro BM and other secondary batter material stocks are likely to be affected by LG Energy Solution Ltd.’s IPO on Jan. 27. EcoPro BM's stock peaked at 575,100 won last Nov. 18 and has dropped 24% since then. Its 12-month forward price-earnings ratio (PER) has surpassed 60, indicating the company’s stocks are valued much higher than the profitability. 

The Korean cathode stock market faces other risk factors. Korea's top chemical company LG Chem Co. will increase investment in cathode material production. Also, global carmakers will use more lithium iron phosphate (LFP) batteries, which China mainly produces. The global LFP battery market has been heated since Tesla announced last October that it will switch to LFP batteries for all standard-range cars.

Celltrion Healthcare’s Chief Executive Kim Hyoung-Ki bought 10,000 stakes on the Kosdaq on Jan.17. However, the stock’s short sales are increasing as the fraudulent accounting scandal is ongoing.

Write to Yoon-sang Koh at kys@hankyung.com
Jihyun Kim edited this article.