EcoPromerty, Another Personal Passion for Secondary Batteries
“KOSPI 200 special inclusion is just around the corner. Until then, ants will drive up the stock price, and then institutions and pension funds will support it. “There is nothing to worry about because the stock price rise scenario is already out there.”
This is what an individual investor said in the EcoPro Materials (EcoPromerty) online stock discussion room on December 6, expressing optimism about EcoPromerty’s future stock price trend. As the possibility of EcoPromerty’s special inclusion in the KOSPI 200 increases, they believe that funds will continue to flow in before and after the announcement of the regular change on December 15, and they will maintain a buy position. Recently, as the number of individual investors with such expectations increases, EcoPromerty’s stock price is soaring rapidly.
Maintain top 50 market capitalization
EcoPromerty is one of the EcoPro Group subsidiaries and mainly produces precursors, a key raw material for secondary batteries. It has been operated as an unlisted subsidiary until now, but was first listed on KOSPI on November 17. EcoPromity suffered from poor performance during the initial public offering (IPO) process. However, the atmosphere reversed immediately after listing, and on December 4, the stock price (based on the closing price) recorded 137,500 won, up about 280% from the public offering price (36,200 won) (see graph). Accordingly, the market capitalization, which was around 2.4 trillion won on the first day of listing, is now approaching 10 trillion won.
The key to EcoPromerty’s stock price surge was its special inclusion in the KOSPI 200. EcoPromity has consistently maintained its place in the top 50 in market capitalization since November 27 (43rd as of December 6). If the current stock price level continues until December 15, the requirements for special inclusion in KOSPI 200 will be met. The reason why index inclusion is interpreted as good news is that stock prices can be expected to rise further due to the future inflow of passive funds (index-tracking funds).
In addition, news of Ecopro BM receiving large orders also drove up Ecopromerty’s stock price. Ecopro BM has decided to supply 44 trillion won worth of cathode materials to Samsung SDI over a five-year period from 2024 to 2028. At this time, Ecopro BM receives precursors from Eco Promity and produces cathode materials, so its performance is expected to improve. EcoPromity recorded an operating loss of approximately 6.9 billion won in the third quarter (July-September) of this year .
Expert: “Stock price falls upon incorporation”
This time, it is individual investors who are leading the rise in EcoPromerty’s stock price. The preference for EcoPro Group stocks, which has continued since the beginning of the year, is also showing up in the ‘youngest’ EcoPromerty. According to the Korea Exchange, from November 17 to December 6, individual investors made a net purchase of 283.78668 billion won in EcoPromity. This is in contrast to net sales by foreign investors and institutional investors of 135.617 billion won and 143.16997 billion won, respectively, during the same period. Ecopromity trading volume is also at the KOSPI’s highest level, driven by strong buying power from individual investors. According to the Korea Exchange, Ecopromity’s trading volume (KRW 12.519 trillion) from November 17 to December 5 ranked first overall, surpassing Samsung Electronics (KRW 10.4276 trillion), the leading KOSPI stock.
However, Ecopromity stopped rising further and has been moving sideways since the first week of December. This is interpreted as the result of the Korea Exchange designating EcoPromity as an investment warning stock on November 28, making both credit and outstanding transactions impossible. The decision on whether to cancel will be made on December 11, at least 10 trading days after the designation. Nevertheless, individual investors appear to be trying their best to boost the stock price. From November 28 to December 6, individual investors made net purchases of EcoPromity worth 61.49051 billion won against ‘selling’ by foreign and institutional investors.
Experts analyze that “even if EcoPromerty’s special inclusion in the KOSPI 200 becomes a reality, there is a significant possibility that downward pressure on the stock price will increase contrary to the wishes of individual investors.” Jang Jeong-hoon, a researcher at Samsung Securities, said in a phone call on December 6, “The financial authorities recently declared a temporary ban on short selling, but they are allowing ‘market maker (securities company) short selling’ as an exception.” He added, “If EcoPromerty is included in KOSPI 200, market maker short selling will be allowed.” “Short selling will become possible, and as a result, the number of sales will increase compared to now, so the stock price may actually fall,” he said.
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