South Korean Battery Stocks Advance as Traders Hunt for Bargains

By Kwanwoo Jun

South Korean battery stocks advanced Monday, as traders hunted for bargains following steep losses recently.

Shares of electric-vehicle battery makers LG Energy Solution and Samsung SDI rose 6.2% and 4.2%, respectively, while those of battery-materials supplier Posco Future M jumped 15%, outperforming the benchmark Kospi index's 0.3% gain.

Bargain hunting largely drove the rally in South Korean battery stocks, according to market analysts.

For the past 12 months, shares of LG Energy Solution and Samsung SDI are down by 21% and 38%, respectively, according to FactSet. Posco Future M are off by 43% for the same period.

"Since battery stock prices have fallen significantly over the past year, it is natural to have expectations of a rebound," Hana Securities analyst Kim Hyun-soo said in a note Monday.

Kim, however, cautioned against being overly optimistic, noting still sluggish EV demand and weak battery investments.

Despite a technical rebound in share prices, data on EV sales and metal prices still point to sluggishness in the EV battery industry, NH Investment & Securities analyst Ju Min-woo said in a note Monday.

Ju said it was still premature to say that Korean EV battery stocks have hit bottom. Investors may get a better picture after U.S. EV manufacturers announce fresh investment plans following the U.S. presidential election in November, he said.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

September 02, 2024 03:54 ET (07:54 GMT)

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