In May Alone, 4.2 Trillion Won Net Buying... Individual Investors' Continued Love for Samsung Electronics

Net Purchase Amount Increased by 150% Compared to Last Month
Buying Pressure Concentrated on Days When KOSPI Fell
Bottom-Fishing Driven by Semiconductor Boom Expectations in Second Half of the Year

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] Despite the KOSPI slipping to the low 3100s this month and the market showing some hesitation, individual investors' love for Samsung Electronics remains strong. With a semiconductor boom expected in the second half of the year, investors seem to be rushing to buy at the bottom as soon as the stock price dips.

According to the Korea Exchange on the 31st, individual investors have net purchased Samsung Electronics shares worth 4.2628 trillion KRW from the beginning of this month through the 28th. This is the largest monthly net purchase since January this year. It exceeded last month's net purchase amount of 2.7316 trillion KRW by more than 1.5 times. Buying momentum intensified especially when the stock market was shaky. During the period from the 11th to the 13th, when the KOSPI fell for three consecutive days and nearly broke below the 3100 level, investors bought shares worth 3.382 trillion KRW. On the 12th alone, net purchases reached 1.3175 trillion KRW, marking the largest single-day net purchase since January 26 this year.

It is interpreted that this is due to expectations of solid earnings in the second quarter and the belief that semiconductor industry conditions will improve from the second half, making Samsung Electronics a market leader. According to financial information analysis firm FnGuide, the market consensus for Samsung Electronics' second-quarter earnings this year is 61.756 trillion KRW in revenue and 10.2832 trillion KRW in operating profit. While revenue is expected to decrease by about 5% compared to the previous quarter, operating profit is anticipated to rise again to the 10 trillion KRW level. Compared to the same period last year, these figures represent increases of 16.6% and 26.2%, respectively. From the third quarter, revenue is expected to rise to 70 trillion KRW and operating profit to 14 trillion KRW.

Choi Doyeon, a researcher at Shinhan Financial Investment, stated, "As factories that had been shut down resume normal operations, shipments will recover from next month, easing the non-memory supply shortage from the end of the second quarter." He added, "In the second quarter, servers are leading memory demand, and in the second half, confidence in the memory upcycle will strengthen, making Samsung Electronics expected to play a leading role in the market."

However, some point out that additional changes are needed for the stock price to jump to the next level. Lee Seungwoo, a researcher at Eugene Investment & Securities, explained, "The fundamentals of Samsung Electronics remain positive given the ongoing trend of earnings improvement. Nevertheless, for a meaningful stock price increase, fundamental changes such as foundry business expansion or mergers and acquisitions (M&A) are necessary beyond the performance of existing core businesses."