Robot-related stocks on the rise

Boston Dynamics CEO Robert Playter, left, speaks about Spot, a four-legged, dog-like robot developed by the firm. Korea Times file

By Lee Kyung-min

Robot-related shares are showing signs of overheating, as evidenced by around a 70-percent increase in value over the past few months in a clearly bearish market.

Behind the steep rise lies market expectations of the rapid growth of the new technology-driven business, as confirmed by Samsung Electronics Vice Chairman Lee Jae-yong announcing a three-year investment plan to the tune of 240 trillion won in future tech industries, including robots and artificial intelligence.

Market watchers say that Samsung beginning the mass production of robots will fan the prospect of mergers and acquisition (M&A) opportunities for small technology developers and robot manufacturers.

Also advancing the resolve of the global conglomerate's future tech business is the establishment of a robot business team. Such a team is an organizational move to strengthen the role and function of the temporary body less than a year after it was launched as a task force.

According to the Korea Exchange, SP Systems, an automated logistics program developer, rose 1,790 won, or 29.88 percent, on Dec. 21. Shares of ROBOROBO also soared 18.45 percent.

Prices of other robot-related stocks continue to increase. Yujin Robot jumped 71.9 percent this month alone, followed by double-digit increases in the share value of its market competitors.

Many local conglomerates have long sought to embrace robot technologies to nurture as key future growth drivers.

LG Electronics acquired SG Robotics and Robostar, a move followed by Hyundai Motor, which acquired Boston Dynamics.

Robot-related stocks have continued on a bullish run since late last year, unlike shares related to cryptocurrency, non-fungible tokens (NFT) and metaverse, all of which have been on a downtrend after a rally.

Anchoring the investor sentiment is expectations for the Consumer Electronics Show (CES) 2022, the most influential global technology event held in Las Vegas from Jan. 5 through Jan. 7 (local time), where robots were among key high-tech future growth drivers that drew the most attention.

Experts say the new industry has huge growth potential, as indicated by the growing need for contactless services brought on by the COVID-19 pandemic, and continued technological development that calls for the convergence of core existing technologies for fully automated services.

“The pursuits of large local and foreign firms ― including Samsung and LG ― to enter the robot market to secure a position of strength in the future business market, are certain to become fierce in the year to come,” a Hi Investment Securities report said. “If large conglomerates begin mass-producing robots, parts makers will stand to benefit greatly. It is high time investors make a long-term, value-oriented decision by being more appreciative of the budding developers of core technologies.”

However, concerns remain that the pandemic-induced cheap liquidity in the stock market is seeking quick, one-off windfall gains without deep and credible analyses of the listed firms.

“The robot-related shares are moving up, a trend oftentimes called 'theme-powered spike' by market analysts. Making a hefty investment relying solely on investment decisions by large firms does not necessarily mean the guarantee of a successful investment,” an industry official said. “The robot industry has explosive growth potential, but it will take a while before any solid performance materialize.”