|LG Chem researchers hold an electric vehicle battery module at the company's plant in North Chungcheong Province in this undated file photo. Courtesy of LG Chem|
By Kim Yoo-chul
With President-elect Joe Biden vowing to take on climate change-related issues, stock market analysts named LG Chem, Hanwha Solution, Samsung SDI, SKC and EcoPro BM as their "top picks" for 2021.
A set of Biden's promises include plans to explore green energy, infrastructure projects and detailed suggestions to address environmental racism. Plus, a large portion of his signature "Build Back Better" economic agenda is also closely related to climate-related policies.
The United States will re-enter the Paris Climate Agreement under Biden and he will prioritize undoing dozens of environmental regulatory rollbacks put into place by incumbent President Donald Trump via executive orders, according to reports and political analysts.
"I would say the hardest part of Biden's green growth policies will be figuring how to implement such an agenda through actual legislation. However, he will likely get some backing from the Republicans as governments around the world will move forward with plans to cut the amount of carbon emissions presented earlier by each government. This will help green stocks rise further," Chung Yeon-seung, an analyst at NH Securities, said Friday.
Based on these observations, Chung expects each government is set to announce the specifics of their own green growth policies. NH named LG Chem, Hanwha Solutions, Samsung SDI, Hyundai Motor, SKC and EcoPro BM as its "top-picks."
SK Securities analyst Seo Choong-woo said Korea has asserted its position on climate-related policy issues. Earlier, President Moon Jae-in and his Cheong Wa Dae economic team said the country will go carbon-free by 2050 and vowed to invest heavily in energy IT, renewable energy and hydrogen economy.
"I think the government and business community are moving to action as various policy packages which could fix some of the flaws of renewable energy are set to be announced in 2021. That will help relevant listed companies see increased medium- to long-term valuation," Seo said, adding EcoPro BM would be the largest beneficiary. "It also does make sense for Hanwha Solutions to launch a massive new share-selling campaign because Hanwha could use the money raised from the new share issuance to expand its group-wide portfolio into solar and hydrogen businesses."
Plus, as Biden has also promised to pursue a 100 percent "clean electricity" standard by 2035 and called for getting the United States to net-zero emissions by 2050 at the latest, the country's top battery suppliers ― LG Chem, Samsung SDI and SK Innovation ― are set to rise further.
How much progress Biden could see still remains largely up to the Republicans. However, most stock market analysts expect the U.S. to be more accommodative for green energy over the next few years. Battery suppliers are the companies that help in the green energy fight without actually producing energy.