SK Hynix Turns to Foreign Net Buying After Shareholder Return Policy… Samyang Foods Expected to Benefit from Exchange Rate

This rapid shift in supply and demand is analyzed as a direct effect of the shareholder return policy, including the recently announced treasury share cancellation.

Park Yeong-in said, "SK Hynix was actually ranked 2nd in foreign net selling early in the session. But in just an hour and a half, it has completely changed direction and is now the 2nd-largest net buyer."

It also unveiled a plan to repurchase and cancel treasury shares worth 40 trillion won.

Park Yeong-in said, "The shareholder return policy announced yesterday has been raised to at least 50% through 2027," adding that this is a substantial amount equal to 3.6% of market capitalization.

SK Hynix's treasury share purchases will proceed over three months, from today through November 19. During this period, daily inflows are expected to rise from an average of roughly 800 billion won to as much as the 1 trillion won range.

Park Yeong-in said, "Starting today through November 19, over three months, the company will acquire treasury shares. On average, the inflow is expected to increase from the mid-800 billion won range to as much as the 1 trillion won range."

SK Hynix's expected free cash flow range was estimated at 60 trillion won (50% of 110 trillion won), but recent trends suggest it could be raised to as much as 90 trillion won. Such an upward revision could serve as a factor providing room for additional dividends.

Park Yeong-in said, "The expected free cash flow range was estimated at 60 trillion won, which is 50% of 110 trillion won. But recent trends suggest it could be revised up to 90 trillion won," adding that this makes investors expect continuity in foreign investor flows.

Samyang Foods imports all of its raw materials, including wheat, so it benefits from improved cost ratios when the exchange rate falls. On the other hand, there is a concern that profits from converting export proceeds may decline for products with a high export share.

Park Yeong-in said, "When the exchange rate falls, the burden of import-related costs can be significantly eased, which is positive. Conversely, for products with a high export share, the conversion profit from selling at higher prices decreases... I think the former effect is greater, since the impact on the import share is larger." He analyzed that cost savings will outweigh concerns about lower exports.

Samyang Foods' Chinese factory is scheduled to begin full operations in the first quarter of next year. This is expected to strengthen its focus on the Chinese domestic market and add roughly 15% of total sales.

Park Yeong-in said, "The Chinese Samyang Foods factory is scheduled to begin full operations in the first quarter of next year. Rather than the export share, the focus on the Chinese domestic market is likely to increase within China itself."

This selling appears to reflect growing concerns over the memory cycle and heightened volatility in government bond yields.

Park Yeong-in said, "Samsung Electro-Mechanics remains at the top. Foreign and institutional investors have been selling for four straight days. Expectations for the industry remain unchanged, so why is supply and demand continuing to flow out? For one, government bond yield volatility is high, which is increasing concerns about memory companies and the memory cycle." He also noted the possibility that hyperscalers' investment stance could become more conservative.

This is also attributed to U.S. stocks, where gains were limited for memory companies and the Philadelphia Semiconductor Index declined.

Byeon Yeong-in said, "Memory companies, and the substrate companies that have been tied to them, also received synchronized flows. The reason the two semiconductor leaders are relatively strong today is that expectations of shareholder returns continue to drive differentiated flows, whereas substrate stocks are reflecting concerns over prolonged high interest rates rather than shareholder return policies, so I think selling pressure is concentrated on Samsung Electro-Mechanics compared with the two leaders today."

As hyperscalers shift their CAPEX investment stance, companies strong in inference rather than training are drawing attention. Samsung Electro-Mechanics is focusing on MLCCs and ultra-precision substrates, and if the conditions for price increases in the second half are met, it could drive revenue growth.

Byeon Yeong-in said, "What I view positively is that, unlike the hyperscalers' CAPEX investment stance, companies with strength in the inference segment rather than training can raise their focus on MLCCs and ultra-precision substrates. In particular, if the conditions for price increases in the second half are met, Samsung Electro-Mechanics' capacity expansion investment can drive its top line, so I think the recent pullback can be used as a buying opportunity." He recommended using the recent correction as a chance to buy.

SK Hynix's second-quarter results fell short of expectations, but a closer look shows that the HBM3E yield issue is improving. This yield improvement and price normalization are expected to concentrate in the second half.

Third-quarter operating profit is expected to be in the 7 trillion won range and fourth-quarter in the 8 trillion won range, implying continued growth over the second quarter. Byeon Yeong-in said, "I think we need to look at SK Hynix. Second-quarter results fell somewhat short of earnings-surprise expectations, but looking at the details, the HBM3E yield issue became a topic, right? I think these factors reflect gradual yield improvement and then a price normalization phase, and that this will be more concentrated in the second half than the first half. Third-quarter operating profit is around 7 trillion won and fourth-quarter around 8 trillion won, so compared with the second quarter, profit estimates can show growth for two consecutive quarters."

He also said that tight memory supply is expected to persist through 2027, so SK Hynix's growth drivers remain valid.

Recent individual flow issues in bio stocks emerge when concrete details such as clinical results, efficacy indicators, or technology transfers come to the fore, but their continuity is limited. Therefore, it is important to reorganize the view around stock groups where results are clearly emerging.

RNA therapeutics are noteworthy because, unlike traditional chemotherapy or immuno-oncology treatments such as ADCs, their platform scalability and commercialization potential are rising. Byeon Yeong-in said, "Looking at recent individual flow issues in bio stocks, when individual issues stand out or concrete details such as clinical results, new clinical efficacy indicators, or technology transfer outcomes emerge, flows are driven, but their continuity is more limited than before. I think it is right to reorganize around stock groups where results are clearly emerging. RNA therapeutics differ from traditional chemotherapy and ADC-type immuno-oncology treatments, and expectations for platform expansion and commercialization potential have risen, so I think this is a good opportunity to reinterpret development results related to RNA therapeutics overall."

This is seen as a good occasion to reinterpret the development results of RNA therapeutics.

Foreign and institutional investors' joint selling of KB Financial is interpreted as following a stagnant flow across large-cap KOSPI stocks, given the absence of special events after the second-quarter earnings season and rising volatility in government bond yields. In the second half, there are concerns that loan volume regulation could narrow net interest margins and reduce interest income.

Byeon Yeong-in said, "Once the second-quarter earnings season ends, there is inevitably no special event or individual issue, and given the recent rise in volatility of government bond yields, it is better to interpret the stagnant flows in KOSPI large caps as a synchronized effect. In the second half, there are variables. Regulating total loan volume could narrow net interest margins and reduce interest income, which is a concern. But KB Financial's non-interest income performance was confirmed in the second-quarter results, so I think we should watch for factors that can partially offset this, setting aside the interest income aspect."; he said non-interest income performance could partly offset concerns about lower interest income.

As U.S. Treasury yield volatility grows, investing in stock groups with solid fundamentals and high dividend reliability is more appropriate than focusing on short-term approaches or thematic flows. With semiconductor and robotics-related events remaining next week, a buying strategy using pullbacks in those sectors also appears valid.

Byeon Yeong-in said, "As U.S. Treasury yield volatility has grown, rather than focusing on short-term approaches or thematic flows, I think we should keep looking mainly at stock groups with solid fundamentals and high dividend reliability. Next week there are still semiconductor and robotics-related events, so I think a strategy of using pauses in the semiconductor and robotics sectors to build positions is valid." He advised this approach.