Surging retail interest in electric vehicle (EV) battery-related stocks has boosted the market value of South Korean steelmaker Posco Holdings Inc. and its affiliated companies by over $11 billion this month. Shares of the parent company have risen 16% to their highest level since 2011, gaining $3.8 billion in market value as investors anticipate growth in its lithium business.*
Performance of POSCO Holdings Inc. stock over 5 years. Source: tradingview.com
Posco has been the top choice among South Korean individual investors in April, with net purchases worth $1.7 billion.
The growing demand for EV batteries highlights the importance of securing key raw materials, especially for resource-scarce countries like South Korea. Analyst Ha In-Hwan of KB Securities Co. noted that Posco is the only company in South Korea capable of managing such a business effectively.
Among the group's companies, EV battery-material supplier Posco Future M Co. has seen the largest gains on the Kospi 200 index this month, with its shares climbing 38% and adding $5.8 billion to its market capitalization.*
Performance of POSCO FUTURE M. since listing on Korea Exchange. Source: tradingview.com
The firm, formerly known as Posco Chemical, supplies battery materials to LG Energy Solution Ltd. and BYD Co.
Posco International Corp., the group's trading house, has seen its shares surge 35% in two sessions after announcing plans to increase its market cap nearly sixfold to 23 trillion won ($17.5 billion) by 2030 through investments in energy and new businesses.*
Performance of POSCO INTERNATIONAL stock over 5 years. Source: tradingview.com
Analyst Rho Wooho of Meritz Securities Co. believes that while Posco Future M has significant growth potential, its stock price has risen too quickly. Posco International also benefited from news that Warren Buffett increased his holdings in Japan's major trading companies last week.
* Past performance is no guarantee of future results.
