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Battery materials

S.Korean battery materials makers see stock prices surge

Global shift to greener mobility is benefiting battery-focused Korean chemical materials makers

By Sep 26, 2021 (Gmt+09:00)

EcoPro BM's battery materials plant in Pohang, South Korea
EcoPro BM's battery materials plant in Pohang, South Korea

Shares of South Korean eco-friendly battery materials manufacturers have been soaring in September, with high expectations on big revenue jumps this year.

Battery materials maker EcoPro BM Co. saw its stock price rise by 45% in September following a 10 trillion won ($8.5 billion) supply deal with SK Innovation Co.

Another battery materials maker L&F Co.'s stock price surged by 19.67% on Sept. 24 alone following Mirae Asset Securities’ report that the second phase of its supply deal with Tesla Inc. is estimated to be worth more than 5 trillion won ($4.3 billion).

On the other hand, Samsung SDI Co.'s stock price fell 8.45% this month due to spin-off concerns, while LG Chem Ltd. is trying to recover following a sharp drop after GM’s recall.

Beyond the US, demand for battery materials is also skyrocketing in China and Europe. Such demand has fueled hydrogen fluoride producer Foosung Co.'s 36% share price rise over the last month. Analysts highlight that the rise was mainly driven by the shortage and resulting price surge of lithium hexafluorophosphate (LiPF6), a type of electrolyte it produces.

Foosung is making dramatic improvements in earnings. The company made a positive turnaround in the second quarter of this year with an operating profit of 7.1 billion won ($6 million), after a long period of losses until the first quarter of this year. Analysts expect the company’s operating profit in the third quarter to be about 14.1 billion won ($11.9 million), almost double that of the previous quarter.

“Further improvements in earnings are expected once its electrolyte plant and specialized gas plant in China ramp up production,” said Eugene Investment & Securities. The securities firm highlighted that the two plants made a loss of 14.4 billion won ($12.2 million) during the first half of this year, but that they are emerging from such losses. Market watchers say that Foosung may also build a battery materials plant in Europe.

Daejoo Electronic Materials Co. is the materials manufacturer with the highest stock price growth this month. Its share price grew by 71.53% in September due to high expectations for its silicon anode materials. Although silicon anodes are not yet widely used in the industry, experts are saying usage will expand rapidly in the following years.

Daejoo Electronic Materials' Jeonju plant
Daejoo Electronic Materials' Jeonju plant

Daejoo Electronic Materials is the world’s third-largest silicon anode materials producer, after China’s Shenzhen BTR New Energy Materials Co. and Japan’s Shin-Etsu Chemical Co.

Hydrogen peroxide maker Hansol Chemical Co. is also expected to see another big jump in stock price. Analysts highlight that the company will go through a positive revaluation in the market as hydrogen peroxide is increasingly used by the battery industry.

“Hansol Chemical will generate 25% of its annual revenue from battery materials by 2024,” said KB Securities.   

Write to Jae-yeon Ko and Hyung-gyo Seo at yeon@hankyung.com

Daniel Cho edited this article.

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