Korea battery stocks: how much energy left?

Strong prospects for electric vehicle batteries have powered a rally in South Korean makers, which are emerging as challengers to established Japanese rivals.

Battery and display maker Samsung SDI shares have nearly trebled so far this year and chemical giant LG Chem almost doubled. SK Energy rose 19 percent in the past week on expectations it will enter the lithium-ion car battery business, which JP Morgan expects will grow to a $6 billion market by 2015.
After the sharp gains, some question whether there is much energy left as the business will certainly take years to grow and a lot of players are already flocking to the budding market.

The global push for green energy and emission-free cars is stoking appetite for battery suppliers, which bulls say is transforming traditional industrial firms into growth stocks.

“This is about a new technology and new market that will become huge in three to five years,” said Jeff Kim, an analyst at Hyundai Securities.

“Battery makers will keep winning new potential clients and expectations for growth will surge every time that happens.”

The electric vehicle market is forecast to reach about 5 million cars in 2015, a new opportunity for rechargeable batteries so far mostly used in mobile phones and laptop PCs.

Reuters