Securities Companies’ EcoPro, EcoProBM Target Downgrades.

Securities Companies’ EcoPro, EcoProBM Target Downgrades.
Perhaps institutional investors are also likely to cut their weight quickly on the stock

I don’t know if foreigners will buy me some redemption
There’s a high possibility that they’ll stay still until June next year and then take a large-scale photo if the reins are released

There’s a possibility that Jisoo will continue to be crushed because of the 2nd round holders… It’s big. Everyone can get very sensitive crying

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Securities firms are on alert by lowering the target prices of secondary battery market stocks EcoPro and EcoProBM, whose stock prices have soared due to a total ban on short selling. This is due to concerns that growth potential could slow down due to rising interest rates and slowing business conditions.

According to the Korea Exchange on the 8th, EcoProBM and EcoPro, the first and second largest KOSDAQ market capitalization, fell 6.68% and 8.85%, respectively, from the previous trading day.

Amid growing volatility among eco-pro stocks, the stock market is wary of overheating stock prices by lowering its target stock price. On the same day, Hana Securities lowered the target stock price of its holding company Ecopro by 24% from 550,000 won to 420,000 won, maintaining its investment opinion “sell.” Hana Securities saw the value of EcoPro, which adds up the value of its subsidiaries, at 10.9 trillion won.

Kim Hyun-soo, a researcher at Hana Securities, pointed out, “Considering the gap with the current market capitalization of 22.9 trillion won (as of the 7th), the current stock price is virtually in a valuation vacuum.”

Eight securities companies also lowered their target prices by an average of 22% on EcoProBM. Most securities firms, including KB Securities (500,000 won → 350,000 won), eBest Investment & Securities (470,000 won → 330,000 won), Shinyoung Securities (450,000 won → 370,000 won), Hana Securities (446,000 won → 337,000 won), Kiwoom Securities (445,000 won → 340,000 won), and NH Investment & Securities (410,000 won → 350,000 won) lowered their target stock prices to around 300,000 won. Meritz Securities (360,000 won → 290,000 won) and Daol Investment & Securities (310,000 won → 250,000 won) offered target stock prices in the 200,000 won range.

Foreign securities firms are more pessimistic. Goldman Sachs (120,000 won) and UBS (126,000 won), Morgan Stanley (220,000 won), Macquarie (210,000 won), JPMorgan (220,000 won) and Credit Suisse (230,000 won) are offering lower prices than domestic securities firms.

Securities firms cite rising weighted average cost of capital (WACC) due to rising interest rates, falling average selling price of cathode materials (ASP) due to falling lithium prices, and slowing growth in the forward market as factors for stock price discounts.

Ahn Soo-soo, a researcher at eBest Investment & Securities, said, “2024 lacks short-term earnings growth momentum because it has no choice but to transparently reflect the demand of existing customers and the atmosphere of the front industry.” Kwon Joon-soo, a researcher at Kiwoom Securities, said, “Short-term earnings uncertainty is expected to expand due to the recent adjustment of the speed of electrification and falling metal prices in the secondary battery industry.”

As there is an atmosphere of high evaluation of EcoPro Group shares, the performance of EcoPro Materials, which entered the general subscription from this day, is also drawing attention. Eco Promotional Materials has confirmed the offering price at 36,200 won, the lowest of the Hope Band (36,200 won to 44,000 won). Another burden factor is the increased volatility of secondary holding companies due to the total ban on short selling.

Han Ji-young, a researcher at Kiwoom Securities, said, “The ban on short selling has made it difficult to gauge and respond to the stock price direction,” adding, “The controversy over the decision to ban short selling is expected to expand the volatility of stock prices and supply and demand in major industries such as secondary batteries, apart from the macro situation.”

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