Despite being the hot topic in the domestic market in the first half of this year, the shares of POSCO Group’s associated companies are currently experiencing a simultaneous downturn. Along with secondary battery-related companies such as EcoPro, share prices have undergone a correction, resulting in a market capitalization reduction of over 50 trillion won (US$36.95 billion) compared to the peak in July.
On Oct. 31, POSCO Holdings concluded trading at 411,500 won, down by 4.97 percent from the previous trading day. All affiliated companies, including POSCO Future M with a decrease of 7.44 percent, POSCO International with a decrease of 7.05 percent, POSCO M-Tech with a decrease of 5.36 percent, POSCO DX with a decrease of 1.80 percent, and POSCO Steeleon with a decrease of 4.55 percent, recorded closing prices in the red.
South Korea’s first POSCO Group stock index fund (ETF), “ACE POSCO Group Focus,” also made its stock market debut on Oct. 17, starting at 9,165 won on the first day and declining to 7,055 won on that day.
The POSCO Group, which is in the process of transforming from a steel company to a secondary battery material supplier, performed exceptionally well in the stock market throughout the first half of the year. During the peak of the second battery stock frenzy in July, the combined market capitalization of six listed companies within the POSCO Group reached as high as 122.40 trillion won. Currently, the total market capitalization stands at just 70.05 trillion won, evaporating by 52.35 trillion won in a mere three months.
The recent sharp drop in stock prices is attributed to the slowdown in the growth of the global electric vehicle market, according to analysts’ assessments.
Tesla closed at US$197.36 on the previous day in the New York Stock Exchange, marking a 4.8 percent decline. Additionally, General Motors (GM) and Ford have recently revised their electric vehicle production targets downward. Concerns about performance are transitioning from electric vehicle companies to battery cell manufacturers and battery material suppliers.
In the third quarter, POSCO Holdings’ eco-friendly future materials business, including secondary batteries, posted an operating loss. POSCO Future M, which engages in the secondary battery material business, also saw its operating profit decline by 54.6 percent compared to the same period last year, reaching 37.1 billion won. Despite news of a temporary agreement that came as the company faced its first strike threat in 55 years since its establishment, the repercussions of the strike risk are still significant.
The key points of the agreement include a basic wage increase of 100,000 won, which includes natural increases, totaling around 170,000 won. It also involves a stock grant of 4 million won, a one-time bonus known as the “encouragement bonus for emergency management participation” of 2.5 million won, local product vouchers worth 500,000 won, the introduction of a bi-weekly 4-day working system, the addition of a 3-day leave for employees’ spouses in case of miscarriage or stillbirth, and the establishment of a task force for the introduction of a performance-based pay system, job grading, and the redesign of welfare benefits.
The agreement also stipulates that the re-employment rate for employees who have reached the retirement age will be set at around 70 percent, and payment will be guaranteed at a range of 57 to 60 million won. This tentative agreement exceeds the levels from the previous year.