Today, we will discuss successful strategies before the market opens, focusing on key sector direction. I'm here with Lee Chang-han, the head of the sales department at IM Securities. Welcome!

Hello, nice to meet you. 

We always start with a discussion about the secondary battery sector. Many people are contemplating how much position they should hold in the secondary battery market right now. There is ongoing competition within this leading sector. Please share your strategy regarding secondary batteries.

I still believe in expanding positions. Most people probably hold a significant portion of their investments in this sector. It seems many are investing in individual stocks. However, the semiconductor sector has also seen a major adjustment recently, which has led to some funds that were previously in semiconductors shifting, particularly towards secondary batteries. Meanwhile, some funds are also moving towards other buyers. As I mentioned last week...

The recent discussions regarding the Federal Reserve's interest rate cuts and the review of the resumption of electric vehicle subsidies in Germany have triggered some reactions. Additionally, in states like Iowa, the sales of new electric vehicles from companies like Hyundai and Kia have shown relatively strong performance. The U.S. electric vehicle market is now experiencing significant sales growth, and forecasts suggest that electric vehicle sales will recover next year. These developments indicate that various momentum factors are emerging, leading to an overall improvement in sentiment within the battery sector. While the third and fourth quarters may not be very positive, there is growing consensus that growth potential will be observed in 2025 and 2026. Recently, financial authorities announced the resumption of short selling, and following that announcement, there has been a strong influx of foreign and institutional investments into the battery sector, which has seen a high level of short selling.

I have organized the short selling net purchase balance of stocks as of September 26. EcoPro BM stands at 7,371 as of September 26. Currently, stocks like POSCO Future and EcoPro have a short selling ratio of about 4% compared to the total. In the case of EcoPro, the short selling balance hasn’t decreased much because the stock price has recently rebounded. The short selling volume has significantly decreased, while for POSCO Future, the short selling balance remains almost unchanged. The quantity of short selling is nearly the same, and the amount also appears stable. Overall, the short selling balance of cathode materials stocks remains high, and the ratio is still considerable. I previously mentioned that EcoPro HN has a relatively high short selling volume compared to the total.

This has decreased by about half. At that time, it was around 1 trillion, which was quite high, but now it has decreased significantly to 193 billion. The recent sharp rebound seems to be due to some short-selling cover. Additionally, if we check the supply and demand from foreign investors and institutions during September, EcoPro BM saw foreign investors purchase 96.2 billion won, while there was no inflow from institutions. LG Energy Solution had foreign investors buy 106.5 billion won, with institutions contributing 26.2 billion won. EcoPro Holdings also experienced simultaneous net purchases from both foreign investors and institutions. In contrast, for Posco Chemical, while institutions have entered, foreign investors have not, resulting in a generally high short-selling ratio for Posco Chemical.

The short-selling balance of EcoPro BM has decreased, and the number of shares held short has also decreased. However, in the case of futures, the short-selling balance has not decreased, which is a notable characteristic. Therefore, if you look at these types of stocks, since discussions about improving the short-selling system have arisen, stocks with high short-selling ratios have experienced significant rebounds, and there has been strong buying interest. Currently, when looking at the supply and demand, LG Solutions, EcoPro, and POSCO Holdings are the three stocks that are seeing simultaneous net buying from foreign investors and institutions. In the KOSDAQ, EcoPro BM is receiving the strongest inflow, while in the KOSPI, POSCO Future is experiencing the strongest buying activity. In fact, among all KOSPI stocks, POSCO Future has the highest short-selling balance.

In the KOSDAQ, EcoPro and EcoPro BM have the highest short-selling balances. These three stocks, in particular, still have a significant amount of short-selling balance and a relatively high short-selling ratio. Therefore, if the sentiment in this primary sector improves, there is a possibility that additional funds will flow into these stocks. I believe that stocks in this category will be more likely to benefit. The interest rate cuts or changes in European policies are underlying factors for the sector, and it will be necessary to check domestic issues as well. Issues related to financial investment companies ultimately connect to liquidity supply, particularly among stocks at the top of the KOSDAQ market capitalization. The short-selling improvement issue you mentioned is likely to be significantly related to the secondary battery sector, right? Yes, it is also connected to the supply and demand situation.

There is a part that can move based on supply and demand, regardless of performance. The biggest weapon of the short-selling forces is the unlimited short selling. However, with the recent announcement from the government and financial authorities regarding regulatory improvements, it seems that the core strength of the short-selling forces will effectively diminish. The biggest weapon is the unlimited short selling. As I mentioned last week, on September 23, the Korea Financial Investment Association announced a revision of the model regulations regarding the change of the upper limit period for alternative trading. Starting in November, institutions and foreign investors will also be subject to the same rules as individuals, with the initial borrowing period limited to 90 days, and even with extensions, it cannot exceed 12 months. This news came out on September 23, and on that day, there was a significant inflow into the secondary sector, coinciding with other developments.

On the day when we announced our intention to change the view on secondary batteries positively, the Financial Supervisory Service presented a guideline on the criteria for short selling without borrowing on September 25. This guideline was designed to help investors correct short selling practices on their own and to enhance the short selling electronic system. It clearly outlined the criteria for judgment that financial authorities interpret and apply during the borrowing and collateral provision processes. Following the announcement of this guideline on short selling without borrowing, stocks such as EcoPro BM and POSCO Future M experienced significant rebounds, and there was a strong influx of demand. There was such glory as well. Additionally, back in July, the Korea Securities Depository and the Securities Finance Company implemented a system where institutions must specify the purpose of borrowing stocks for short selling when they borrow them.

I made a mistake with the menu, but now it's hard to distinguish. I can't tell whether the stock borrowing for the short selling is for borrowing or another purpose, and it has been used interchangeably. Some institutions that actually engaged in illegal short selling said that this was due to improper management of stock borrowing for short selling, which led to mistakes. To prevent this, the first measure is that weight-based short selling will be restricted. Starting from March 31, 2024, naked short selling will also become difficult. As I mentioned earlier, including the purpose of short selling is aimed not only at preventing naked short selling but also at blocking unlimited short selling. Therefore, starting from March 31, 2024, and from this November, unlimited short selling will be restricted, making it practically impossible.

In the perspective of short-selling forces, it can be seen that they are losing all three of their weapons. If illegal short-selling is caught, they could face the maximum penalty under the revised Capital Market Act, which has passed through the National Assembly. I think the government has done quite well regarding the short-selling system. They have almost perfectly improved the system to meet the demands of the market. Moving forward, I believe we won't hear claims that stock prices are falling due to short-selling.

Now, regarding the secondary battery sector, I'm curious about the top picks you are observing. In previous discussions, you have consistently confirmed a positive outlook on nickel and lithium. Your opinions must still hold, right? Yes, I've been discussing that since October of last year.

I have been consistently mentioning that, starting next year, particularly in the North American market, the most serious shortage will be in the phone sector. Therefore, I will continue to maintain that the set-top box market is stable. Regarding the semiconductor side, last week I talked about CAM and Duksan Tech, but personally, I prefer Duksan Tech for the semiconductor sector. Duksan has various businesses and materials, including additives, intermediate buyers, semiconductor materials, and display materials, so I believe it has better momentum. On the other hand, CAM experienced a sharp drop last Friday. The reason for this decline seems to be related to an issuance issue. Typically, when issuing bonds, it is done in a series of three, and there was a concern regarding the evaluation by credit rating agencies.

Now, regarding the issuance of public bonds, it seems that the market has accepted this, and since we cannot issue bond 3-12, we have opted for a public offering. From what I understand, there has been a significant demand from institutions for the recent bond issuance related to CAM, which indicates a strong confidence in the success of the offering. As a result, we are preparing for a large-scale public offering. 

We are targeting institutions for this large-scale offering, and regarding the central subsidiary, it seems difficult for them to proceed with a standalone offering due to recent news. Therefore, from NKM's perspective, it appears that there is also a purpose to introduce lithium through the related company, Central. This situation may not necessarily be seen as a negative factor. Ultimately, there is a goal to proceed with the issuance, so if there has been a recent sharp decline, it is important to consider that context.

From a buying perspective, it might be a good idea to consider this. As I mentioned earlier, among the top 10 in the secondary battery sector that I talked about last week, there are stocks with high short selling balances, and foreign and institutional investments are flowing into them. EcoPro BM, EcoPro POS Holdings, and LG Solutions are some of those stocks that are experiencing strong demand. If you hold such stocks and see a significant pullback, it might be a good opportunity to average down during the recent price dips. Please keep in mind the stocks mentioned and the preferences we discussed. 

Today, Manager Young's stock pick is Seojin Systems. It is a stock you can check in the ES sector. Looking at the earnings consensus, it seems that Seojin Systems' earnings consensus is somewhat...

I checked because it seemed unusual. Recently, a report came out from Key Kwon, indicating that in the first half of the year, the sales proportion of ES equipment was 57%. This shows a significant warning about the strong position in the ESS market. They have considerable experience in large-scale operations, along with know-how regarding facilities and the collection of manufacturing processes, which has led to high productivity and clear cost management. As a result, they are currently supplying many global companies, and this year alone, equipment sales are projected to reach 700 billion won, with expectations of exceeding 1 trillion won next year. Recently, the number of client companies has definitely expanded, and the target market is also growing. Kim Jeung Kwon has set this year's operating profit consensus at around 132.5 billion won, while the overall market consensus is 163.1 billion won. Next year, it is expected to reach 274 billion won, and by 2026, it will exceed 300 billion won.

We are estimating the operating profit. When looking at the valuation side, the current price-to-earnings ratio is around 12 to 13 times for this year, while for 2026, it is expected to be between six to seven times. Recently, the ES market is anticipated to grow at an annual rate of 72%, which is a significant growth compared to the electric vehicle market. Previously, the ES market was at about one times the stationary market, but it has recently risen to about one and a half times. The market is experiencing rapid growth. For instance, Tesla's Megapack is showing almost 100% to 200% growth per quarter, so it would be good to look at related systems as well. Reports have come out from three places: SK Securities, Daishin Securities, and Q. The upper target price suggested by Daishin and SK is both 41,000 won, while some independent research has suggested a target of 45,000 won.

Based on the responses provided, I will set the target price at 41,000 won according to the report from Kim Kwon-sa. You mentioned a target price of 40,000 won. Let's remember together the stocks related to the secondary battery sector, such as Cam, Duksan Techopia, and when considering the issues related to supply and short selling, we should also pay attention to EcoPro BM, EcoPro, POSCO Dings, and LG Energy Solution. Additionally, among the stocks previously mentioned, we should keep in mind those related to equipment, such as PNT. Today, we checked the leading sectors and top picks together with Sales Manager Lee Cheong-hwan. Thank you for your insights today. Thank you.

"걸리면 최대 무기징역" 공매도 세력의 핵심 무기 상실! 2차전지 수급 기대↑ 탑픽은? / 이창환 iM증권 영업부장

월스트릿, 여의도에서 벌어지는 별들의 전쟁! 포트폴리오의 구원자는?


"걸리면 최대 무기징역" 공매도 세력의 핵심 무기 상실! 2차전지 수급 기대↑ 탑픽은? / 이창환 iM증권 영업부장

스크립트