National Pension Service Makes Large-Scale Purchases of Household, Materials, and Components Stocks

Industries with Outstanding Competitiveness
Three Companies Increased Shares This Month
Jinus, SKC, Samsung Electro-Mechanics in Order

[Asia Economy Reporter Park Jihwan] It has been revealed that the National Pension Service (NPS) has significantly increased its holdings in mattress and furniture company Jinus, as well as materials and components stocks such as SKC and Samsung Electro-Mechanics in the second half of the year. These stocks share the common characteristic of having strong competitiveness within their industries amid expected favorable market conditions.

According to financial information provider FnGuide on the 26th, among the stocks in which the NPS holds more than 5% equity from the 1st to the 23rd of this month, the three companies where the NPS increased its stake are Jinus (7.14% → 8.16%), SKC (9.47% → 10.06%), and Samsung Electro-Mechanics (10.00% → 10.02%), respectively.

Jinus, whose main business is manufacturing and selling bed mattresses, is expected to see substantial earnings growth starting in the second half of the year. Based on last year's sales, Jinus's major revenue composition is mattresses (51.9%) and bedroom furniture (44.5%). By region, sales in the U.S. market account for an overwhelming 89%. In particular, from the second half of the year, Jinus is expected to benefit relatively from relief on anti-dumping tariffs. Lee Ji-young, a researcher at NH Investment & Securities, stated, "Indonesia, where the factory is located, has an anti-dumping tariff rate on mattresses for the U.S. market of only 2.22%, which is significantly lower than the average 158% for mattress manufacturers from other countries, highlighting its price competitiveness within the industry," adding, "The price increases implemented in the first half of the year are also expected to yield visible benefits starting in the second half."

SKC was chosen due to the overwhelming expected effect of capacity expansion. SKC has been focusing on aggressive capital investment driven by the surging demand for copper foil, a key material for electric vehicle batteries. The scale of announced expansions (CAPEX) over the past year and a half has reached 1.7 trillion KRW. Kim Hyuntae, a researcher at BNK Investment & Securities, said, "Due to the explosive demand from customers, copper foil supply remains tight to the extent that factory operations need to be expedited," and added, "The rise in raw material prices, such as copper, has also contributed to an increase in copper foil export prices."

In the case of Samsung Electro-Mechanics, structural growth is expected over the next several years in its core products such as multilayer ceramic capacitors (MLCC) and package substrates. Hwang Gowoon, a researcher at KB Securities, forecasted, "The electric vehicle market, currently at about 3.6% this year, is expected to expand to 11.3% by 2025, and the rapidly growing electric vehicle market will drive earnings growth," adding, "Once the Tianjin plant starts operations in the second half of the year, the sales proportion of automotive MLCC will increase from 7.6% this year to 20.9% in 2024."

On the other hand, the NPS reduced its holdings in Doosan Infracore by 1.22 percentage points, a stock whose price surged recently due to split and merger issues. Considering the stock price has risen 98.5% this year, it is presumed that some profit-taking occurred. The NPS also reduced its stakes in Korea Financial Group and NH Investment & Securities by 0.21 percentage points and 1.00 percentage points, respectively, amid issues related to private equity fund redemptions. Additionally, the NPS slightly decreased its holdings in Seohung (10.12% → 9.96%), Poongsan (10.09% → 9.95%), Hyundai Mobis (10.04% → 9.99%), and Fila Holdings (10.01% → 10.00%).