Green battery Ecopro stock soars919%،the biggest gain for any company this year
Ecopro Co.، the South Korean Green battery material producer for electric cars، has seen the its shares soar more than 919% this year، the biggest gain for any company with a market capitalization of at least $10 billion thanks to an army of Korean retail investors who drove South Korean firm Ecopro’s stock rise that its founder Billionaire Lee Dong-chae’s fortune has swelled by $4.5 billion although he is imprisoned for insider trading.
Ecopro Co.، the South Korean Green battery material producer for electric cars، has achieved blistering run that EV stock rally makes little that can dent the world’s top performing stock this year، not even its founder being sent to prison for insider trading.
Ecopro Co. shares rise thanks to Korean retail investors
Bloomberg News Agency reported that shares rise of Ecopro Co.، the South Korean Green battery material producer for electric cars، courtesy of an army of Korean retail investors، has also created massive wealth gains for imprisoned billionaire Lee Dong-chae، its former chairman and chief executive officer as he and his family have seen their fortune swell by about $4.5 billion this year to reach $4.9 billion، according to the Bloomberg Billionaires Index.
Ecopro Co.، the South Korean Green battery material producer for electric cars، has been able to achieve sock rally this year more than any company in the world as these gains have largely happened while Lee has battled insider-trading charges that resulted in him receiving a two-year prison term and a fine of 2.2 billion won ($1.7 million) for violating Korean capital markets law.
Imprisonment of Ecopro Co. chairman and chief executive officer
The imprisonment of the chairman and chief executive officer of Ecopro Co.، the South Korean Green battery material producer for electric cars، which South Korea’s Supreme Court upheld last month، has focused attention on Ecopro’s governance at a time when concerns are mounting that its share price growth is unsustainable and has run ahead of fundamentals.
Park Ju-gun، head of corporate research firm Leaders Index in Seoul thinks that even Lee expected Ecopro Co.، the South Korean Green battery material producer for electric cars، to grow so fast even if its internal infrastructure may not have developed at the speed of their growth، as the company is feeling Lee’s absence، with a spokesperson saying in a written comment to Bloomberg that it’s in desperate need of his forward-looking insight and spirit to challenge.
Components or materials used in electric car production rally
Behind Ecopro Co.، the South Korean Green battery material producer، rally are South Korean retail investors، who are a dominant force in the nation’s equity market as Electric vehicle-related stocks are the hot trade and companies that provide components or materials used in electric car production are having a bonanza this year.
I is said also that Ecopro BM Co.، Ecopro’s listed subsidiary that provides cathodes used in lithium-ion batteries for customers like Samsung SDI Co. and SK On Co.، is also up 227%، and is the biggest company on the country’s tech-heavy junior exchange Kosdaq followed by its parent.
Growing demand for firms benefit from booming EV market
While the South Korean Green battery Ecopro’s rapid ascent is a testament to investors’ growing demand for firms that will benefit from the booming EV market، there are concerns about whether the growth has gone too far، too fast for market commentators caution that the speculative bets placed by the pandemic-induced flood of new retail investors are capable of creating brutal losses as well as dizzying gains.
Park Ju-gun، head of corporate research firm Leaders Index in Seoul stated that the rechargeable Green battery market undoubtedly has future growth potential but it’s not normal to see only certain players have huge gains but because of its popularity among retail investors، the South Korean Green battery Ecopro has become overheated.
Ecopro revenues jump 64% to 2 trillion won
Ecopro، the South Korean Green battery، affirmed that its revenue jump 64% to 2 trillion won in the second quarter from a year earlier and most of its revenue is generated by Ecopro BM، while its operating profit went up less than 1% to 170.3 billion won because rising metal prices and currency fluctuations affected profitability despite strong sales of EV cathodes.
The Billionaire Lee Dong-chae، the chairman and chief executive officer of Ecopro Co.، the South Korean Green battery material producer for electric cars، who comes from a poor family in the southeastern port city of Pohang and who studied business management at night college، founded Ecopro in 1998 after he was inspired by the 1997 Kyoto Protocol’s aim to reduce greenhouse gas emissions.
Ecopro switching 20 years ago to developing materials for Green batteries
The 63-year-old Billionaire Lee Dong-chae، who had previously worked as an accountant and had another business selling furs that didn’t take off، initially focused Ecopro on making environmentally friendly products before switching 20 years ago to developing materials for Green batteries.
The Billionaire Lee Dong-chae stepped down as CEO of the South
Korean Green battery material producer for electric cars، in March last year after an allegation that several employees، including Lee، committed insider trading that a statement from the Supreme Court last month said Lee used his account under a different name، and those owned by his children، to trade Ecopro BM stocks، with the undisclosed information about the company’s cathode supply deals in 2020 and 2021 and by doing so he earned some 1.1 billion won.
However، Lee remains the company’s largest shareholder، holding about 25% directly and indirectly as well as he and his family own the minimum stakes to maintain their management control over Ecopro، the South Korean Green battery material producer for electric cars.
Ecopro set up a monitoring system for insider trades
The Ecopro spokesperson revealed that after the allegations against Lee were made، the Ecopro company set up a monitoring system for insider trades، including those in non-listed subsidiaries and it also ramped up compliance efforts by introducing a practice of reporting stock transactions by high-profile executives and employees.
Ecopro، the South Korean Green battery material producer for electric cars joined earlier this year the Fair Trade Commission’s list of large business groups with more than 5 trillion won in asset size and this inclusion makes the holding company with 26 affiliates a subject of more regulations and oversight، while it remains to be seen whether Ecopro can continue living up to investor expectations، with its sky-high valuation giving rise to cautious views as there’s a wide discrepancy between the current price and the company’s value.
