Samsung Electro-Mechanics, Secondary Batteries, Semiconductor ETFs Promising

Cho Jin-pyo, CEO of Dalant Investment, diagnosed that Samsung Electro-Mechanics is currently undervalued. He explained that its price-to-earnings ratio (PER) is around 18 times based on its estimated earnings in 2028, which is significantly lower compared to its past peak of 30 times. Morgan Stanley also classifies Samsung Electro-Mechanics as an undervalued stock and expresses high expectations for the glass substrate cycle.

Morgan Stanley's target price for Samsung Electro-Mechanics, ranging from KRW 2.62 million to KRW 3 million in a bull market, applies a PER value of 33 times its estimated 2028 earnings. CEO Cho Jin-pyo pointed out that this target price is quite aggressive compared to past peaks and added that such a target price can only be achieved if accompanied by actual performance improvement due to the rise in Multi-Layer Ceramic Capacitor (MLCC) prices.

CEO Cho Jin-pyo recommended investing in semiconductor exchange-traded funds (ETFs) for novice investors who struggle with selecting individual stocks. He explained that stable returns can be expected by choosing ETFs that include large semiconductor companies like Samsung Electronics and SK Hynix, as well as products that include leading material, component, and equipment (SooBooJang) stocks. He emphasized that the benefits of diversified investment can reduce risk compared to individual stocks, making it a suitable investment method for novice investors.

CEO Cho Jin-pyo revealed that many secondary battery-related products were among the top 50 in exchange-traded fund (ETF) returns recently. In particular, solid-state battery and energy storage system (ESS) related ETFs showed high performance, recording a 19% increase over one month. He emphasized that these achievements are based on actual performance, not just market expectations, and analyzed that the expansion of the secondary battery sector is robust.

LG Energy Solution secured performance momentum with a 4.6-fold increase in energy storage system (ESS) segment sales year-on-year in the first half. Furthermore, it is continuing to grow by securing a large-scale contract worth KRW 3 trillion in new data center orders. Samsung SDI secured KRW 4.45 trillion in cash by selling display equity, preparing funds for North American battery production investment. Both companies are showing solid growth, explained CEO Cho Jin-pyo.

As global companies like Microsoft and Amazon directly build dedicated power complexes near data centers, the importance of securing power stability is growing. Consequently, energy storage systems (ESS) are emerging as a necessity, not an option, for data centers. In particular, with the movement to exclude Chinese batteries, domestic battery products are expected to gain a halo effect, and the spread of AI investment will lead to the power infrastructure and battery sectors, CEO Cho Jin-pyo predicted.

Analyzing the exchange-traded fund (ETF) market for one month from late July to late August, CEO Cho Jin-pyo pointed out that 95% of individual investors invested in leveraged products, expressing concern. He warned that the forced liquidation of leveraged products was the main cause of the sharp market decline in July, and the concentration of individual investors in leveraged products is very dangerous. CEO Cho emphasized that investment in ETF leveraged products is absolutely prohibited for investors, urging a cautious approach.