Foreign Investors Sweep Up 9 Trillion Won in Samsung Electronics... Stock Ownership Returns to Level from One Year Ago

Samsung Electronics Hits 52-Week High... Approaching 70,000 Won Mark
Expectations Rise on Memory Semiconductor Supply Stabilization

The foreign ownership rate of Samsung Electronics has once again reached its highest level of the year, recovering to the level seen about a year ago. This is thanks to expectations of an improvement in the semiconductor market, which has led to foreign investors buying Samsung Electronics shares.

According to the Korea Exchange on the 22nd, Samsung Electronics closed trading at 68,500 KRW, up 0.15% from the previous trading day. On the same day, the stock price surged to 69,000 KRW during the session, setting a new 52-week high. The stock price has risen about 24% since the beginning of this year.

On this day, the foreign ownership rate was recorded at 52.19%, the highest since February 24 of last year, when it was 52.23%. Last year, foreign investors sold off Samsung Electronics shares amid forecasts of a sluggish semiconductor market due to an economic downturn, hitting a low of 49.24% on September 29 of the same year.

However, this year, foreign investors have maintained a net buying trend in Samsung Electronics, increasing their ownership ratio. Since the beginning of the year, foreigners have net purchased Samsung Electronics shares worth 9.1355 trillion KRW. Especially this month alone, foreign investors have bought about 1.3 trillion KRW worth of shares. As foreigners have concentrated their net purchases on Samsung Electronics, which accounts for more than 20% of the market capitalization of the KOSPI market, the overall foreign ownership ratio in the KOSPI market has also recovered to the 32% range for the first time in over a year.

The securities industry analyzes that the stock price is on the rise due to expectations of stabilization in memory supply and demand. It is expected that the stock price will continue to rise until selling prices increase. Kim Young-geon, a researcher at Mirae Asset Securities, said, “For memory manufacturers, valuation pressure will be limited initially during the contract price increase phase and secondly until the price increase rate slows down,” adding, “The stock price momentum will continue until contract prices rise in the future.”

Supply and demand improvement is expected to occur around the second half of the year. This is because the three major memory companies?Samsung Electronics, SK Hynix, and Micron?are conducting meaningful levels of production cuts. Demand improvement is predicted to appear mainly in high-performance PCs.

Do Hyun-woo, a researcher at NH Investment & Securities, said, “Due to aggressive inventory adjustments by customers since the second quarter of last year, some set inventories are expected to peak in the first quarter of this year and then start to decline,” adding, “Memory inventories are also expected to peak in the second quarter and then turn to a downward trend, and in the second half of the year, hyperscalers’ investments will resume due to increased peak utilization rates of data centers.”

However, Samsung Electronics is estimated to record poor performance in the second quarter as well. The securities industry estimates the operating profit for the second quarter at 266.5 billion KRW, which is expected to decrease by 98% compared to the same period last year. This is also about a 60% decrease compared to the first quarter.