Korea Battery Materials National Growth Fund to reduce cash flow risk

Research evidence excerpt

Korea Battery Materials National Growth Fund to reduce cash flow risk

J P M O R G A N Asia Pacific Equity Research

28 May 2026

Korea Battery Materials

National Growth Fund to reduce cash flow risk

The National Growth Fund could ease battery material suppliers’ funding Korean Autos

ACconstraints. The program aims to channel W150tn over 2026-30 into “advanced Sonny Lee

strategic industries” (incl. batteries). Starting with the initial W30tn in 2026, Korea (82-2) 758 5716

Development Bank’s W3tn direct investment and W10tn ultra-low-interest loans sonny.lee@jpmorgan.com

would provide funding at rates close to Korean sovereign bonds. Retail demand Seri Yoon

also looks strong: the W0.6tn retail tranche reached 99.5% subscriptions within (82-2) 758 5704

three days of launch, as of 27 May. We see the National Growth Fund as a key seri.yoon@jpmorgan.com

J.P. Morgan Securities (Far East) Limited, Seoul

de-risking lever for the battery supply chain. Cathode companies under our Branch

coverage run net D/E of 106-214%, and they have a stronger incentive to tap the

fund. L&F appears best positioned to benefit from the bountiful national funding

(highest net D/E), alongside its differentiated end-market exposure and early

positioning in LFP. We reiterate our current recommendations: L&F OW; Ecopro

BM (EBM) N; Posco Future M (PFM) UW.

• The National Growth Fund is a government initiative to channel W150tn

over five years (2026-30) into "advanced strategic industries" such as

semiconductors, healthcare, AI, robotics and batteries. Of the first-round

funding of W30tn in 2026, we believe Korea Development Bank's W3tn direct

investment and W10tn ultra-low-interest loans would offer borrowing rates

close to Korean sovereign bond levels. The retail tranche of the National