‘First Half Report Card’ Individual Solo Minus... Lagging Behind Due to Secondary Battery and Entertainment Slump

Net Purchases and Returns by Buyer Type in the First Half
Foreigners Achieve High Returns with Semiconductor and Low PBR Stock Buys
Institutions Recover Lost Returns with Value-Up in Secondary Battery Stocks
Individuals Face Negative Returns Due to Weakness in Secondary Battery and Entertainment Stocks

The investment returns by major supply and demand entities in the first half of the year showed that foreigners overwhelmingly outperformed. They recorded high returns by heavily purchasing semiconductor stocks and those related to corporate value-up programs, which led the stock market rally in the first half. Institutions and individuals were held back by the sluggish performance of secondary battery stocks. In particular, individuals recorded negative returns due to the poor performance of secondary battery and entertainment stocks.

According to the Korea Exchange on the 27th, foreigners have most heavily net purchased Samsung Electronics this year up to the 25th of this month, followed by SK Hynix, Hyundai Motor, Samsung C&T, Samsung Electronics Preferred, HD Hyundai Electric, Kia, Alteogen, KB Financial Group, and Krafton. Among these 10 stocks, 7 showed double-digit returns, and two of them recorded triple-digit gains. HD Hyundai Electric rose 260.71%, and Alteogen increased by 193.91%. Additionally, SK Hynix rose 59.01%, KB Financial Group 46.03%, Krafton 45.92%, and Hyundai Motor 41.77%, all climbing over 40%, driving the rise in foreigners' returns. The average return of the top 10 net purchased stocks by foreigners reached an impressive 68.75%. The strategy focused on artificial intelligence (AI) and corporate value-up programs, which led the stock market rally in the first half, resulted in high returns.

Compared to the overwhelming returns of foreigners, institutions recorded modest performance. Institutions most heavily purchased Shinhan Financial Group in the first half, followed by LG Chem, Hyundai Motor, Celltrion, HD Hyundai Marine & Shipbuilding, Hana Financial Group, EcoPro BM, JC's Medical, L&F, and POSCO International. The average return of the top 10 net purchased stocks by institutions was 7.12%. HD Hyundai Marine & Shipbuilding, which was listed in May, played a key role, rising 66.31% since its listing, recording the highest return among the top 10 net purchased stocks by institutions. Four of the top 10 net purchased stocks recorded negative returns. LG Chem (-29.66%), Celltrion (-11.46%), EcoPro BM (-51.67%), and L&F (-29.12%) mainly related to secondary batteries, underperformed. The gains from low price-to-book ratio (PBR) stocks such as Shinhan Financial Group (18.18%), Hana Financial Group (39.40%), and Hyundai Motor were offset by losses in secondary battery stocks.

Individuals alone recorded negative returns. They were held back by the poor performance of secondary battery and entertainment stocks. Individuals most heavily net purchased Naver (NAVER) in the first half of this year, followed by Samsung SDI, LG Chem, JYP Entertainment (JYP Ent.), LG Energy Solution, Enchem, SK Innovation, Hotel Shilla, HYBE, and POSCO Holdings. Among these 10 stocks, 9 recorded double-digit negative returns except for Enchem. JYP Entertainment showed the largest decline at 45.71%. Nine of the top 10 net purchased stocks by individuals, except Enchem, hit their 52-week lows during the first half of this year. In particular, Naver, Hotel Shilla, POSCO Holdings, and LG Chem consecutively set new 52-week lows as of the previous day.

Secondary battery stocks, which negatively affected the returns of institutions and individuals, are expected to find it difficult to rebound in the second half as well. Jang Jeong-hoon, a researcher at Samsung Securities, said, "Secondary battery stocks have fallen 38% over the past 11 months, returning to early 2023 levels," adding, "Due to the slowdown in front-end electric vehicle demand growth, adjustments in the operating rates of related suppliers, and price declines caused by weak metal prices, concerns over poor earnings are expanding. Despite nearly a year of price adjustments, valuation burdens have increased." He continued, "Due to the conservative sales strategy changes by automobile manufacturers (OEMs) caused by weak front-end demand and the failure of metal price rebounds, it is difficult to confidently expect a meaningful price rebound in the second half. Additionally, the U.S. presidential election event is a risk that increases volatility for Korean secondary battery stocks."