’35 → 115 trillion’ jackpot… Ants pack their money and flock to ‘this stock’

Share prices of POSCO Group affiliates are skyrocketing every day. As it succeeded in transforming from ‘the largest steel company in Korea’ to a ‘secondary battery material company’, its market capitalization soared from 35 trillion won to 115 trillion won in just five years.

On the 24th, in the stock market, POSCO Holdings closed at 642,000 won, up 16.52%. As the market capitalization increased to 54.3793 trillion won, it overtook Samsung Biologics and became the 4th largest market cap in the stock market.

Posco International, an affiliate, rose to the price limit (upper limit) this morning. POSCO Future M (10.50%) and POSCO DX (7.36%) also rose significantly. The market capitalization of the POSCO Group increased by 14.9371 trillion won on the same day, reaching 115.321 trillion won.

This year, POSCO Holdings soared by 132%, POSCO Future M by 201%, POSCO International by 192%, and POSCO DX by 436%. Posco Holdings and POSCO Future M are attracting attention for their growth potential in the secondary battery business. POSCO International announced its record-high operating profit (KRW 357.2 billion) as of the second quarter on the same day, and POSCO DX ’s upcoming listing on the stock market was a boon to the stock price.

A representative of an asset management company said, “The fact that the POSCO Group has been reborn from a steel company to a future materials company is highlighted, and the stock prices of affiliates are running together like a theme stock.”

The market cap of the six companies in the POSCO Group…키톤벳
Changed image from 115 trillion 32.1 billion steel chimney stock increased by 15 trillion in one day … Future M soared 201% this yearPOSCO Group stock is the most enthusiastic stock among individual investors along with Ecopro Group stock. Posco Holdings is the number one stock purchased by individuals this year. As the company was reborn from a steel company to a secondary battery material company, people’s interest in it grew. As the company succeeded in vertically integrating secondary batteries from raw materials to products, shares of affiliates such as POSCO Future M and POSCO International also rose together.

◆Individual net purchases of 6.6 trillion won this year, No. 1

On the 24th, POSCO Holdings closed at 642,000 won, up 16.52%. This month alone, the rate of increase reached 65.5%. The rise was driven by individual investors. Individuals net bought 6.6 trillion won worth of Posco Holdings shares this year.

Until a few years ago, POSCO was known as a ‘funny chimney stock’ among individual investors. This is because the leadership of the global steel industry has shifted to China, and the future growth engine has been lost. The international price of hot-rolled steel sheets, the mainstay of POSCO, is set in Yuan, the Chinese currency unit. The stock price has hovered in the box range of 150,000 to 300,000 won for eight years.

The dramatic change at POSCO began in July 2018 when POSCO CEO Jeong-Woo Choi (pictured) took office. Chairman Choi, who served as the president of POSCO Chemical (currently POSCO Future M), announced the ‘100 Management Reform Tasks’ immediately after taking office and announced his intention to foster the secondary battery material business as the group’s growth engine.

Anticipating that the demand for secondary battery materials will surge due to the growth of the electric vehicle industry, the group started to improve its constitution. Accordingly, POSCO Holdings increased its investment in securing and processing nickel and lithium, key raw materials for secondary batteries. POSCO Future M has strengthened its secondary battery core material business, such as precursors and cathode and anode materials. Posco Future M’s cathode material orders this year amount to 83.5 trillion won.

As ‘Seohak ants’, who were enthusiastic about Tesla, an American electric vehicle company, began to pay attention to the domestic secondary battery value chain in 2021, the rise of POSCO Group stock began in earnest. Posco Holdings, Posco International, Posco Future M, Posco DXThe combined market capitalization of six listed companies, including Chairman Choi, increased 3.3 times from about 35.2 trillion won in July 2018, when he took office, to about 115 trillion won on this day. Posco Group’s market cap ranking was 6th at the end of last year, but it pushed out Kakao Group stock and rose to 5th place (115.321 trillion won) on this day. There are observations that Hyundai Motor Group (KRW 124,369.3 billion) in fourth place will be overtaken sooner or later.

Chairman Chey said at the ‘Corporate Citizenship Day’ event held that day, “We have transformed the group’s business portfolio into a system that enables sustainable growth over the past five years.”

◆Overheating warning due to short-term surgeSome have predicted that POSCO’s steel business, which is its mainstay, may be weakening as it focuses on the secondary battery business. However, POSCO dispelled concerns by announcing the results on the same day. POSCO Holdings’ operating profit in the second quarter of this year was 1.3 trillion won, up 85.7% from the same period last year.

The stock market is generally giving a positive evaluation to the upward trend of POSCO Group stock backed by performance. Jang Jae-hyeok, a researcher at Meritz Securities, explained, “The upward trend in lithium prices and the start of lithium commercial production next year can act as additional factors to increase stock prices.”

However, there are many voices of concern in the market that POSCO Group stocks are showing signs of overheating in the short term like Ecopro Group stocks. This is because the valuation (share price relative to earnings) has risen excessively due to the short-term surge. As of this day, POSCO Future M’s price-to-earnings ratio ( PER ) reaches 102.9 times.

Some analyze that excessive dependence on China is also a weakness in the secondary battery material business. According to the Korea Customs Service, the average reliance on Chinese imports for raw materials for cathode and anode materials, such as nickel, lithium, cobalt, and graphite, imported into Korea last year reached 85%. Although the POSCO Group is striving to internalize the mineral smelting and processing process and diversify its material supply chain, it is analyzed that the business may be shaken by China’s movements for the time being.

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