National Pension Service Includes Semiconductor Materials, K-Beauty, and Power Stocks in Q2 Basket

19 New Large Shareholding Stocks Added in Q2
6 Semiconductor Materials and Components Companies in the 'Super Cycle'
3 K-Beauty Companies Also Appear as 'New Faces'

The National Pension Service (NPS), the largest institutional investor in the domestic stock market, has significantly increased its holdings in cosmetics, semiconductor materials, parts and equipment (SoBuJang), and electric power stocks. It appears to have joined the recent surge in artificial intelligence (AI) data centers, the semiconductor upcycle, and the hot K-beauty trend.

According to the Financial Supervisory Service's electronic disclosure system on the 5th, the NPS disclosed 126 changes in its large-scale holdings (ownership of 5% or more) this month. In the second quarter, 19 newly listed companies were added to its large-scale holdings. Among them, APR had the highest ownership at 11.2%. It was followed by Samhwa Electric (10.06%), HD Hyundai Marine Solutions (6.23%), Samhwa Capacitor (6.21%), and STI (6.09%). The number of large-scale holdings increased by 8 from 275 in the first quarter to 283 in the second quarter.

Semiconductor SoBuJang and K-beauty 'New Faces' Appear in Large Numbers

APR, which the NPS holds the largest stake in by ownership percentage, is a beauty tech company that went public last February. After five months, the NPS has become a 'major shareholder' (ownership of 10% or more or de facto controlling shareholder) of APR. While the NPS reduced its holdings in K-beauty companies, including cosmetics, in the first quarter, it jumped back on the K-beauty wave in the second quarter. Small and medium-sized cosmetics brands such as Tony Moly (5.03%) and skin care company Wontec (5.01%) were also newly added to the large-scale holdings in the second quarter. According to the Ministry of Trade, Industry and Energy, cosmetics exports in the first half of this year reached a record high of $4.81 billion.

Companies in the materials, parts, and equipment sector supporting the semiconductor industry, which is said to have entered a 'super cycle,' also appeared as 'new faces' in the NPS portfolio. These include STI (6.09%), Techwing (5.16%), Jusung Engineering (5.13%), Amotech (5.09%), DI (5.06%), and PSK Holdings (5.06%). With the competition among U.S. big tech companies for AI data centers heating up, electric power stocks have also been added to the basket. These include Samhwa Electric (10.06%), Samhwa Capacitor (6.21%), and Daehan Cable (5.01%). Daehan Cable is considered one of the 'big four' domestic cable companies.

Betting on Neglected Fashion... Defense Stocks Reduced

Most of the newly added companies belong to industries currently experiencing or about to experience a boom. However, there was an exception: 'fashion stocks.' The NPS newly added large-scale holdings in Youngone Corporation (5.01%), famous for its outdoor brand 'The North Face,' and JS Corporation (5.04%), an OEM handbag manufacturer. The textile and apparel sector has been classified as the worst-performing sector in terms of stock price growth over the past year. Unlike other consumer goods that are doing well in exports, domestic fashion companies continue to suffer from poor earnings. However, it appears that the NPS is betting on a potential industry rebound in the future.

Meanwhile, among existing large-scale holdings, a notable change is the reduction in defense stocks. During the second quarter, the NPS reduced its stake in Hanwha Aerospace, the leading defense stock, from 8.58% to 7.56%, a decrease of 1.02 percentage points. Stakes in other defense companies also decreased: LIG Nex1 from 12.32% to 10%, and Poongsan from 11.43% to 9.95%. This marks a complete reversal from the first quarter, when the NPS had been actively buying defense stocks.