"Samsung Electronics Falls to 62nd Floor Despite 'No Rise' Outlook... What About Retail Investors Who 'Picked Up'?"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Myunghwan] The stock price of Samsung Electronics, which firmly holds the top spot in market capitalization in the domestic stock market, is showing unusual signs. Last year, it traded in the high 80,000 won range, eyeing the '100,000 won mark,' but due to successive adverse factors, it plummeted to the 62,000 won range. Although securities firms unanimously recommended it as a buying opportunity at a low price, it was found that only individual investors were net buyers. Concerns are growing over the expansion of losses for individuals who have made large-scale purchases amid fears of persistent high inflation and semiconductor industry downturns, which raise the possibility of further stock price declines.

As of 1:13 PM on the 13th, Samsung Electronics was trading at 62,200 won, down 2.51% (1,600 won) from the previous trading day, breaking its 52-week low for the second consecutive day. The continued decline marked the lowest intraday price in about 1 year and 7 months since the intraday low of 61,000 won on November 13, 2020. The recent concerns over economic slowdown and semiconductor industry uncertainties have highlighted a weak trend in Samsung Electronics' stock price. Warnings from Intel's management about weakening demand in the semiconductor sector further fueled concerns about declining semiconductor demand, accelerating the stock price drop.

Samsung Electronics' stock price has steadily followed a downward trajectory since the beginning of this year. On the first trading day of the year, it traded in the 80,000 won range, but successive adverse events such as the Ukraine war and the U.S. Federal Reserve's big rate hikes have driven the decline. Market capitalization also shrank by 18.83%, from 469 trillion won at the beginning of the year to 381 trillion won as of June 10. Due to the continued downtrend, Samsung Electronics, which was ranked 15th globally in market capitalization last year, slipped seven places to 22nd this year.

Nevertheless, most securities firms maintain a 'buy' rating on Samsung Electronics, citing sufficient potential for stock price appreciation. Some reports suggest that the current price already reflects the adverse factors, making it a buying opportunity at a low price. Mirae Asset Securities upgraded Samsung Electronics' investment opinion from 'Trading Buy' to 'Buy' on the 7th, citing sufficient upside potential due to the establishment of the Extreme Ultraviolet (EUV) ecosystem and 3D DRAM-based technology.

Although securities firms unanimously recommend buying, only individual investors are actually purchasing Samsung Electronics shares. On the 10th, despite the declining market, individuals bought 666.9 billion won worth of Samsung Electronics shares, showing the only net buying trend. It is estimated that low-price buying surged as Samsung Electronics hit a new low that day. Looking at the entire year, individuals have been the sole net buyers, purchasing 13.5 trillion won worth of Samsung Electronics shares.

On the other hand, both foreigners and institutions have engaged in large-scale selling of Samsung Electronics. Since June, foreigners have sold 1.55 trillion won worth of Samsung Electronics shares, marking the highest net selling during this period. Samsung Electronics was also the top net selling stock for institutions during the same period, with institutions net selling 478 billion won worth of shares. For the entire year, foreigners and institutions have net sold Samsung Electronics shares worth 7.027 trillion won and 6.74 trillion won, respectively. Samsung Electronics was the top net selling stock for both foreigners and institutions.

Despite the buy recommendations from securities firms, ongoing adverse factors make a continued downtrend inevitable for the time being. Concerns are emerging that individuals who have made large-scale purchases may face significant losses. Kim Jang-yeol, a researcher at Sangsangin Securities, predicted, "If high inflation is not controlled and geopolitical risks intensify, leading to a worst-case scenario where consumption shrinks much faster than expected, temporary sharp stock price declines may occur in the gap period before measures such as production cuts and investment reductions by semiconductor and IT companies take effect."