POSCO steals limelight from EcoPro in stock rally

A bird's-eye view of POSCO Chemical's cathode plant in Gwangyang, South Jeolla Province / Yonhap

By Lee Min-hyung

POSCO Holdings is stealing the limelight from EcoPro as the most-sought-after battery stock here, achieving a surprisingly sharp rally on hopes for deeper expansion into the promising battery materials industry.

The holding company of the nation's leading steelmaker has displayed a monster rally in its share price this month, after POSCO revealed its group-wide vision to build a total battery materials value chain.

According to data from the Korea Exchange, the combined market capitalization of POSCO Holdings and its affiliates came in at 115 trillion won ($89.95 billion) as of closing on July 24, up 44.27 trillion won from the end of June. The stock price of the holding firm drove the robust rally by soaring more than 65 percent this month alone.

This was driven by unwavering investor frenzy into battery stocks. This year, EcoPro has stood at the center of the spotlight in the local stock market, with shares of the battery materials maker's key affiliates achieving unprecedentedly sharp rallies in the secondary Kosdaq market. No other firms have so far stolen the glory of EcoPro in terms of the pace of stock growth.

Fueled by the EcoPro-driven battery fever, POSCO Holdings is on track to divert investors' attention with its ambitious plan to generate 62 trillion won in sales from its secondary battery materials businesses by 2030.

Brokerage houses are reacting to the surprising rise of POSCO shares by revising the target stock prices of POSCO and its subsidiaries.

“POSCO Holdings will become an oligopolistic secondary battery player,” said Choi Mun-seon, an analyst at Korea Investment & Securities. The securities firm drastically raised the firm's target stock price from 500,000 won per share to 900,000 won. POSCO Holdings shares were traded at around 660,000 won as of Tuesday afternoon.

Hyundai Motor Securities also shared an optimistic outlook on POSCO shares, saying that POSCO Holdings' recent stock growth is “not excessive.”

“The company's plan to produce 420,000 tons of lithium annually by 2030 will be reflected on its stock value,” said Park Hyun-wook, an analyst at the brokerage house.

Considering the bullish investor sentiment, the securities firm revised POSCO Holdings' target stock price to 745,000 won per share from 470,000 won.

Even if POSCO has been at the center of the market's attention recently, shares of EcoPro and its affiliates extended their winning streak on Tuesday. EcoPro shares attained a double-digit growth of more than 11 percent, Tuesday, from a day earlier. Shares of EcoPro BM, a cathode materials maker, also grew 14.2 percent during the same period.