Foreigners Sweep Up Semiconductors and Batteries This Month

Samsung Electronics Net Purchase Worth 2.0992 Trillion Won

[Asia Economy Reporter Geum Bo-ryeong] Foreign investors, who have net purchased 4.8 trillion KRW worth of stocks in the KOSPI market since the beginning of this month, have been selectively buying stocks such as semiconductors and batteries that can realize profits during the economic recovery phase.

According to the Korea Exchange on the 17th, from the 2nd to the 16th of this month, foreigners net purchased 4.7988 trillion KRW in the KOSPI market. During the same period, individual investors net sold 5.4134 trillion KRW worth of stocks.

The sector that attracted the most attention from foreign investors was semiconductors, where earnings improvement is expected. They scooped up Samsung Electronics shares worth 2.0992 trillion KRW. The second most purchased stock was SK Hynix (736.7 billion KRW). Kim Young-woo, a researcher at SK Securities, explained, "Samsung Electronics and SK Hynix’s DRAM inventory reduction strategy, aimed at inducing customers to resume purchases through proactive price cuts in the fourth quarter, is likely to succeed," adding, "DRAM is passing through the bottom of the market cycle, making it an opportune time to buy."

Samsung Electronics’ stock price rose 15.51% in two weeks, from 57,400 KRW on the 2nd to 66,300 KRW on the 16th. SK Hynix also increased by 23.12%, from 79,600 KRW to 98,000 KRW.

Foreign investors also focused on buying stocks in the battery sector. LG Chem (727.3 billion KRW) and Samsung SDI (265.3 billion KRW) ranked third and fourth in net purchases, respectively. The outlook for secondary batteries is bright next year, with export growth trends continuing. Daishin Securities estimates LG Chem’s operating profit for next year at 3.58 trillion KRW, a 45% increase compared to the previous year. Samsung SDI is expected to directly benefit from the high growth of electric vehicles in Europe, where the OEM (Original Equipment Manufacturer) sales proportion is significant.

Other stocks in the top 10 net purchases by foreigners included Kakao (140 billion KRW), Samsung Electro-Mechanics (109.3 billion KRW), Hana Financial Group (92 billion KRW), SK Chemicals (87.4 billion KRW), Samsung C&T (75.8 billion KRW), and Hyundai Mobis (75.7 billion KRW). Kakao showed quarterly average sales growth of 9% compared to the previous quarter and 29.8% compared to the same period last year over the past year as of the third quarter, exceeding market expectations each quarter. With steady earnings improvement expected to continue into next year, a favorable stock price trend is anticipated. Despite the fourth quarter being a traditional inventory adjustment season, Samsung Electro-Mechanics is expected to continue improving performance in multilayer ceramic capacitors (MLCC) and substrate solutions due to the delayed iPhone launch effect.

Shin Seung-jin, a researcher at Samsung Securities, analyzed, "The current foreign inflows show a differentiated pattern centered on large-cap KOSPI stocks with improving earnings," adding, "Recently, foreigners have been buying mainly top market cap IT and secondary battery stocks, and it is effective to focus on leading stocks in sectors such as Samsung Electronics and LG Chem, where profit growth can accelerate during the economic recovery phase."