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Should I buy Eco-Pro, which makes me hungry just by looking at the price table?

Which stock will be the hottest stock in the Korean stock market in 2023? The result already seems obvious. It seems unlikely that there will be a hot topic stock that surpasses Ecopro within this year. The stock price of EcoPro, which was 103,000 won on the closing day of the stock market last year (December 29), jumped 12-fold in 7 months to 1,207,000 won on July 31. This is the highest rate of increase (1043%) in both the KOSPI and KOSPI markets.

Ecopro is not such a lightweight sport. At the end of 2022, the market capitalization was 2,596.6 billion won, ranking 7th among KOSDAQ stocks. Within 7 months, the market capitalization of EcoPro increased by 29.5429 trillion won, reaching 32 trillion won on July 31st. It is the second largest on the KOSDAQ after its subsidiary Ecopro BM (40,978.7 billion won).

The increase in market capitalization of Ecopro during the seven-month period accounted for 21.5% of the total market capitalization increase of 137,634.9 billion won in the KOSDAQ market during the same period. The KOSDAQ index rose by 256.68 (37.8%) from 679.29 to 935.97, of which 56.6 were raised by EcoPro. Adding the 31,971.2 billion won increase in the market capitalization of its subsidiary, Ecopro BM, the two stocks accounted for 45% of the increase in the index.

Institutions and foreigners, ‘passive’ in the beginning

Established in October 1998, Ecopro separated the secondary battery (battery that can be recharged and discharged) material business in May 2016 and established Ecopro BM. In addition, in May 2021, it split the air pollution prevention and eco-friendly materials business division to establish Ecopro HN Co., Ltd. and convert it into a holding company. Both subsidiaries are listed companies. As an unlisted subsidiary, there is Ecopro Materials, which manufactures and sells high-nickel precursors, a key material for high-nickel cathode materials for secondary batteries. Ecopro’s share price rose due to expectations for the growth of its subsidiaries in the secondary battery business. This year’s performance shows that the secondary battery market is growing rapidly amid the rapid expansion of the electric vehicle market.

It can be said that stock prices began to rise in earnest from January 25, when the stock market reopened after the Lunar New Year holiday this year. The closing price of the transaction before the holiday was 112,900 won. Earlier, on March 31, the US government released the main contents of the detailed guidelines for tax credit for electric vehicles under the Inflation Reduction Act ( IRA ). Ecopro went through short adjustments every 2-3 days and rose vertically to the closing price of 769,000 won on April 11 (the highest intraday price of 820,000 won). After that, it fell to 574,000 won on April 21st, then rebounded to 733,000 won on May 2nd, drawing a big wave of the first surge.

Who aggressively bought stocks and pushed the share price up? In the eight trading days from January 25 to February 3, institutional investors net bought 150,000 shares. It was a passive net purchase. Foreigners net bought 440,000 shares during the same period, and then bought EcoPro more aggressively. Until February 15, the cumulative net purchase by foreigners was 2.18 million shares. The stock price closed at 213,500 won on the day. After that, it was an individual investor who took over the baton. The ants, who turned to net buying from February 16th, net bought 3.6 million shares by April 11th. The rosy expectations of individual investors began to overwhelm the passive attitude of institutional and foreign investors who coldly calculate the future corporate value.

Securities companies do not often issue analysis reports on stocks whose stock prices are rising steeply. In particular, since it is overvalued, I avoid reports telling me to sell it. After Samsung Securities issued a report with a target stock price of 160,000 won on February 3, when the share price closed at 137,600 won, securities companies were silent. What broke the long silence메이저사이트 was a report by Kim Hyun-soo, an analyst at Hana Securities, on April 12, the day after the transaction closed at the closing price of 769,000 won. He said EcoPro is a “ great company , but it ’s already too expensive to own.”) and presented a 12-month target price of KRW 454,000. was to sell. As profit-taking sales poured in, the stock price went into an adjustment period. The report was written after confirming that Ecopro’s first quarter sales (on a consolidated basis) increased by 202.5% and operating profit by 233.2% compared to the same period last year, similar to the consensus of the securities industry.

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Thanks to the delayed recovery of the semiconductor economy?

Ecopro’s share price fell to 521,000 won on May 15th. After that, it rebounded and continued to rise gradually, and on June 7, it soared by 16.96% (closed price of 662,000 won), creating a sharp rise again. There was no special good news, but there were many YouTube broadcasts recommending strong purchases the day before the holiday. There is also an analysis that stock market funds have returned to secondary batteries as investors have not been able to find a suitable investment destination as the expected recovery of the semiconductor economy has been delayed. The stock price soared 20.4% on July 3, easily surpassing the previous peak, and started an upward rally again. The news that US electric vehicle company Tesla’s second-quarter sales reached 466,000 units, exceeding the market forecast of 445,000 units, an 83% increase compared to the same period last year, boosted stock prices. The stock price rose to 1,293,000 won on July 25th at the closing price. And the next day (26th), it rose to 1,539,000 won during the intraday, but was pushed to 1,136,000 won, and on the 27th, it was pushed to 961,000 won during the intraday and closed the transaction at 985,000 won. If you bought it for 1,539,000 won and sold it for 961,000 won, it would have been a huge jump, with a loss of 37.6%.

During the second surge, active buyers were foreign investors. Between July 11 and 18, executives at EcoPro, including President Choi Moon-ho (2,800 shares) sold 13,160 shares, but the stock price did not drop. Kim Hyun-soo, an analyst at Hana Securities, issued a new report on August 4 after four months. The fair share price was presented at 555,000 won, less than half of the closing price of 1,207,000 won on the 3rd. He said that more than 70% of Ecopro’s corporate value comes from Ecopro BM, and that the fair market capitalization of EcoPro is 11.8 trillion won, including the value of Ecopro BM’s holdings of 9.8 trillion won considering the stake. For now, this is the only analysis report on EcoPro.

Investors gather in anticipation of rapid growth, and more investors flock to stocks because stock prices are soaring. Investors invest while watching how others move. When the heat cools off, it’s over. After that, the stock price follows the adage, ‘the higher the mountain, the deeper the valley’. In 2021, metabus-related stocks have similarly surged. The upward trend did not last for several months. Recently, stocks related to China’s rare earth weaponization and room-temperature superconductors soared and withered. Not to mention improving performance, this is because strong ingredients that continue to raise expectations have not been connected. Ecopro’s share price fluctuates between 1.1 million and 1.2 million won. Investors are still exploring what materials remain to enable a third surge.

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