Investigation Targeting Mirae Asset, KB, KTB, Shinhan, Hanwha Asset Management
Focus on AI-Centered Global Industry Changes and Geopolitical Industrial Structure Reorganization
The fourth quarter begins immediately after the Chuseok holiday. If this year's 'investment farming' has not been satisfactory, it is necessary to take the last quarter as an opportunity to reorganize and restructure your portfolio. Major domestic asset management companies foresee that themes such as artificial intelligence (AI), semiconductors, electric vehicles, K-defense, energy, and technology security will lead the market going forward. This is the result of a survey conducted by Asia Economy targeting five major domestic asset management companies: Mirae Asset, KB, Korea Investment & Securities, Shinhan, and Hanwha Asset Management.
The most notable sectors in the fourth quarter of this year are artificial intelligence (AI) and semiconductors. Most asset managers analyzed that with the growth of AI and the semiconductor industry, an improvement in business conditions is expected, such as increased demand for high-performance memory semiconductors. Following the earnings announcements in the second quarter, memory companies have been reducing production, leading to a reduction in valuation losses due to inventory adjustments, and a sequential turnaround of DRAM companies is expected due to increased AI demand. Nam Yong-su, head of ETF management at Korea Investment & Securities Asset Management, explained, "The semiconductor sector will continue to present opportunities due to the full-scale commercialization of AI and the geopolitical industrial restructuring caused by US-China supply chain issues."
In particular, positive prospects are emerging for the Japanese semiconductor industry. Japan has traditionally shown strength in semiconductor materials, parts, and equipment (SoBuJang). One of the factors driving the recent rise in the Japanese stock market is Japanese semiconductor SoBuJang companies. Japan is regarded as a strategic fortress amid rising geopolitical risks. Accordingly, investments by global major semiconductor companies such as Samsung Electronics and TSMC in Japan are continuing. This suggests that Japanese semiconductor SoBuJang companies can expect benefits. The strong incentive policies of the Japanese government also enhance the attractiveness of Japan's semiconductor industry. A Hanwha Asset Management official explained, "The weak yen resulting from Japan's monetary easing policy can positively impact the performance improvement of export-oriented Japanese semiconductor companies," adding, "Investors can also expect foreign exchange gains when the yen appreciates."
Mirae Asset also has a positive outlook on the semiconductor market. With the benefits of AI semiconductor growth and semiconductor price increases confirmed in earnings, a strong upward momentum is expected. A Mirae Asset Management official said, "The synergy effect between Samsung Electronics' High Bandwidth Memory (HBM) and foundry packaging acts as a key positive factor for the semiconductor ecosystem, including domestic semiconductor SoBuJang companies, highlighting the Korean semiconductor industry as a core sector benefiting from the AI-centered global industrial structural changes." A Shinhan Asset Management official forecasted, "New demand such as AI servers is emerging, and market interest in back-end process companies is gradually increasing," adding, "Performance improvement is expected due to increased demand in the HBM value chain."
Electric vehicles and K-defense sectors are also attracting attention. The domestic defense industry has strengthened its global competitiveness and, like semiconductors, has established itself as a representative export industry. Since the Russia-Ukraine war, the new Cold War system has intensified, and countries around the world are sending love calls to domestic defense companies. Expectations for diversification of export target countries such as India, the UK, and Australia are also growing, so the growth trend of domestic defense companies is expected to continue.
Due to the nature of the defense industry, performance is predicted based on order backlogs. Currently, major defense companies are expected to continue strong performance based on ample order backlogs. Recently, Hanwha Aerospace announced an armored vehicle export contract with Australia. This is significant as it represents a large-scale export to a country other than Poland. It suggests the possibility of additional and continuous exports. Major domestic defense companies such as Hanwha Aerospace and Hyundai Rotem are also preparing for a second contract with Poland.
The electric vehicle-related industry is also gaining more attention as the transition to future mobility becomes increasingly visible. Kim Jeong-hyun of Shinhan Asset Management's ETF Business Division explained, "The automotive industry transitioning to autonomous driving is transforming into a convergence industry of machinery, chemistry, and electrical/electronic industries," adding, "Interest is growing in companies related to automotive electronics (electrically conductive automotive parts) and automotive parts companies that are strengthening competitiveness in the transition to future cars." There is also analysis that recent concerns about a slowdown in electric vehicle demand present a buying opportunity at low prices.
It is also necessary to pay attention to beneficiary industries related to the strengthening of energy security in major countries. Amid moves to strengthen energy security, investment benefits are expected for nuclear power and crude oil production companies. Investments and workforce acquisition efforts to secure energy supply chains are likely to contribute to long-term growth across industries. Medical device companies related to skin beauty, implants, and dental equipment are also expected to attract attention in the fourth quarter based on stable performance.
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