Secondary Battery Surge: Foreign Capital Inflow and Early Positioning Strategy Crucial

Attention is focused on whether secondary battery stocks will transition to a full-fledged rally after their recent sharp rise. CEO Han Kyu-soo stated that he has consistently advised individual investors to sufficiently prepare secondary battery stocks in their portfolios.

However, analysis suggests that whether this rebound leads to a true upward trend depends on foreign capital inflow. Currently, the secondary battery sector's strong fundamentals, including growth potential and improved earnings, are re-emerging, leading to positive forecasts.

Analysis suggests that foreign investor capital inflow is an unpredictable variable, making it difficult to know exactly when it will occur. Therefore, an 'early positioning' strategy—pre-empting undervalued blue-chip stocks and waiting patiently—is emphasized as the most effective approach at this time.

Considering the market's characteristic dependence on foreign capital inflow, individual investors are advised to adopt a long-term perspective based on corporate value rather than blindly chasing stock prices.

Excessive holdings by individual investors are identified as the main reason for the weakness in large-cap semiconductor stocks like Samsung Electronics and SK Hynix. Analysis suggests that foreign investors tend not to easily push up stocks that individuals have bought in large quantities.

This is because foreign investors typically shake up the stock price for an extended period, inducing individual investors to sell their holdings out of exhaustion. Only after this process is complete can the stock price begin its full-fledged ascent, according to the explanation.

Although Samsung Electronics announced a large-scale shareholder return policy of 100 to 110 trillion won, disappointment was expressed in the market. As some securities firms had initially expected up to 150 trillion won, the announced amount did not meet market expectations.

This disappointment led to simultaneous selling by foreign and institutional investors, driving down the stock price. While the shareholder return policy itself is positive, the discrepancy with overly high market expectations is seen as having led to short-term stock price sluggishness.

Samsung Electronics and SK Hynix are currently undervalued and have many positive factors, according to analysis. However, considering that many positive developments have already been reflected in the market, but the stock prices have not yet fully rallied, it is expected to take some time for a significant ascent.

Currently, it is not a matter of negative news but rather a lack of short-term momentum and a need for speed control. A full-fledged rally can be expected once an upward trend pattern, such as the 20-day moving average turning upward, appears.

While disappointment with the shareholder return policy was cited as the cause of Samsung Electronics' stock plunge, critics suggest this decline was excessive. The shareholder return policy was announced at a level consistent with market consensus, which is a clear positive from a mid-to-long-term perspective.

Despite a massive sell-off by foreigners (3.8 trillion won), the opinion is that a stock price drop of 8-9% due to only short-term negative news is excessive.

Foreign investors do not instantly drive up stocks in which individual investors hold large volumes. Instead, analysis suggests they tend to shake up stock prices to induce individual investors to sell their holdings before initiating a full-fledged rally.

The explanation is that stock prices can only surge when individual investors are exhausted and sell off their holdings, and the supply of shares diminishes. Therefore, individual investors who have invested in Samsung Electronics and SK Hynix are urged to exercise patience, invest time, and overcome foreign investors' manipulation strategy.

Current overall stock market analysis indicates that it continues to maintain an upward trend. The KOSPI's 20-day moving average turning upward supports this.

In particular, the semiconductor market is full of positives with no negative factors, and Samsung Electronics and SK Hynix are evaluated as absolutely undervalued. The growth potential of artificial intelligence (AI) and the semiconductor market is expected to continue in the future.

A mid-to-long-term roadmap for the secondary battery sector suggests a gradual increase starting in the second half of this year, with accelerated growth next year and full-blown explosive growth the year after. This implies that significant profits can be expected with a 1-2 year investment horizon.

Investors are advised to approach secondary battery stocks with a long-term perspective of at least 1-2 years, rather than seeking short-term gains. The current trend can be viewed as the initial stage of a long-term growth cycle.

The upward momentum for the semiconductor market is analyzed to stem from the stabilization and decline of US Treasury yields, rather than corporate earnings announcements. This is because corporate earnings are likely already reflected as positive news in the market.

Therefore, if the US Treasury market stabilizes and interest rates decline, this will be a crucial driving force for the semiconductor sector's rise. Investors are advised to respond strategically with portfolio adjustments from a medium-term perspective.

A major factor behind the recent surge in secondary battery-related stocks is the news of Samsung SDI's sale of its stake in Samsung Display. Samsung SDI announced plans to fully utilize the proceeds from this sale for investing in secondary battery capacity (production capability).

This news led to an improvement in supply and demand for the secondary battery sector, primarily driven by institutional investors. In particular, a long candlestick with no upper shadow is interpreted as evidence of strong rebound buying.

The full-fledged growth of the Energy Storage System (ESS) market is acting as a mid-to-long-term growth momentum for the secondary battery industry. Furthermore, as the US and Europe intensify their checks on Chinese-made batteries, this is seen as a significant positive for Korean battery companies.

There is also a possibility of increased demand for Korean batteries in defense sectors such as drones, indicating that the secondary battery industry is facing growth opportunities in various areas.

Samsung SDI and LG Energy Solution are cited as representative key leaders in secondary batteries. In terms of materials stocks, LG Chem and POSCO Future M are ranked first and second, respectively.

SK Innovation, in particular, should be noted as an important stock due to its high potential for earnings improvement. These stocks are expected to directly benefit from the growth of the secondary battery market.

Analysis suggests that a full-fledged rebound in securities stocks is likely to gain momentum only after an upward trend in the overall index is confirmed. While Q3 earnings are expected to be somewhat sluggish, Q4 is projected to see improved earnings and highlight undervalued appeal.

The prolonged accumulation by foreign investors in securities stocks is also interpreted as a positive sign. It is expected that securities stocks will also rise along with an improvement in the overall market trend.

It requires further confirmation whether today's secondary battery rebound is accompanied by genuine capital inflow or is merely a temporary bounce. However, even if stock prices decline tomorrow, a strategy of 'dipping one's toes' into some secondary battery-related stocks in advance is emphasized as effective.

This is a proactive response in anticipation of future capital inflow improvements, and a dollar-cost averaging approach would be effective during price declines, it was advised. A strategy of steadily accumulating based on long-term growth potential is needed.

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