Secondary battery stocks, which have been navigating a long tunnel due to the electric vehicle chasm (temporary demand slowdown), rallied across the board on Tuesday.
The gains are attributed to expectations for earnings improvement and securing next-generation growth drivers, which translated into buying momentum.
As of 2:04 p.m., Lotte Energy Materials (020150.KQ) was trading at 44,750 won, up 10.63% from the previous close, according to the Korea Exchange (KRX). The company is expected to see earnings improve on growing expectations for its circuit foil business, a future growth engine. Notably, rosy forecasts have emerged that the company could achieve a company-wide turnaround to profitability by 2027, driven by expanding sales of battery foil for energy storage systems (ESS) and circuit foil.
"The business center of gravity is shifting from battery foil to circuit foil, entering a new growth phase," said Kim Myung-ju, an analyst at Shinhan Investment Corp. "Circuit foil production capacity is expected to increase significantly from 6,700 tons this year to 16,000 tons by 2027."
Kim added, "Circuit foil for artificial intelligence (AI) substrates commands a T-value (processing fee) more than three times higher than battery foil, and the premium expands as products become more advanced. We believe this will be the 'winning pitcher' that can lift profit margins through product mix improvement, not just volume growth."
Beyond Lotte Energy Materials, other secondary battery-related stocks also gained. LG Energy Solution (373220.KS) was trading at 412,000 won, up 3.39% from the previous close, while Samsung SDI (006400.KS) rose 3.36% to 453,250 won. EcoPro BM (247540.KQ) and EcoPro (086520.KQ) advanced 3.84% and 1.48%, respectively.
"Signals of a demand-side bottom, such as rising EV search volumes and increasing penetration rates, are partially confirmed, but secondary battery sector stock prices have yet to fully reflect this," said Lee Hyun-wook, an analyst at IBK Investment & Securities. "In particular, even companies whose estimated 2026 revenue is recovering to or exceeding 2023 levels have yet to see their market capitalizations recover."
Lee added, "Given that profitability recovery, client inventory normalization, shipment rebounds, and policy visibility all need to come together, we assess the current period as one where a time lag remains between the industry bottoming out and stock price normalization."
