Battery Stocks Rebound... Securities Industry Says "Full Rebound Yet to Come, Crossing the Trough"

# South Korean Battery Stocks Surge on Global EV Sales Growth South Korean battery manufacturers and secondary battery companies have seen a significant uptick in stock prices, driven by rising global electric vehicle (EV) sales. Analysts remain cautious, however, suggesting that a full recovery might take more time due to anticipated weak first-quarter earnings in the sector. According to data from the Korea Exchange on February 11, leading battery-related stocks like SK Innovation (up 6.02%), EcoProBM (up 5.40%), POSCO Future M (up 4.39%), LG Energy Solution (up 3.10%), L&F (up 3.59%), and Soulbrain (up 2.89%) all registered strong gains. This upward movement is attributed to meaningful increases in global EV sales in January. # Significant Growth in EV Sales Market research firm EV Volumes.com reported that global EV sales in January reached 1.33 million units, marking a 21% year-over-year increase. Europe led the pack with sales of 271,000 units, a 28.9% rise—the highest growth rate since January of the previous year. The U.S. also saw an 18% increase, with sales hitting 118,000 units. Jinsu Jung, an analyst at Heungkuk Securities, noted, “The European EV market is showing signs of positive change, with sales improving significantly. CO2 emission regulations seem to be having an effect, and it is unlikely that this sales trend will slow down in the near future.” # Mixed Performance Among Battery Companies Samsung Securities analyst Jeong-hoon Jang added, “Global EV battery installations totaled 63.9 GWh in January, a 23% year-over-year increase. Among the major domestic players, LG Energy Solution saw a 74% surge to 9 GWh, while SK On grew by 30% to 2.8 GWh. Conversely, Samsung SDI experienced a downturn, with a 25% decline to 2.1 GWh.” # Outlook for the First Quarter Despite the positive performance in January, experts predict a downturn in first-quarter earnings for secondary battery companies. Although EV demand is expected to bottom out in Q1, inventory adjustments may extend their impact into the first half of the year. Jinsu Jung of Heungkuk Securities explained, “First-quarter results for the secondary battery sector are likely to worsen compared to the previous quarter, primarily due to continued demand slowdown from key customers engaged in inventory adjustments.” He further elaborated, “The prolonged industry downturn is attributed to an accumulation of negative inventory effects across the value chain, affecting not just EV OEMs but also battery cell and material suppliers.” Jeong-hoon Jang from Samsung Securities warned that the European Commission’s recent unveiling of the 'European Automobile Industry Action Plan,' which includes plans to revise CO2 emission standards, could impact EV sales strategies for European OEMs, making it difficult for investor sentiment to improve soon. # Stock Market and Investment Strategy Jang also mentioned that the lifting of short-selling restrictions on January 31 could introduce new volatility into the stock market. He advised a conservative approach to investment in the South Korean secondary battery sector for March. “The domestic stock market must factor in the upcoming changes in short-selling regulations, which could bring about new investment dynamics and price volatility. Therefore, a cautious investment strategy is advisable for South Korean secondary batteries in March,” he concluded.