Semiconductor, Airline, and Defense Stocks Promising… Rznomics Top Pick

HBM price increases and supply shortages are expected to persist, and uncertainty surrounding the midterm elections is expected to ease after mid-October.

The host stated, "DS Investment & Securities' answer was that it is still a period to increase the weighting of large-cap semiconductors."

DS Investment & Securities predicted that semiconductor material, component, and equipment (SoBujang) companies will show strong performance in 2027. Increased facility investment will lead to an increase in equipment and component orders, with the backend process sector expected to benefit particularly from HBM4 price increases and TSMC's CoWoS expansion.

The host said, "It was said that SoBujang could be quite strong in 2027."

Third-quarter earnings are expected to surpass market estimates, with the effect of 8-inch foundry price increases and full factory utilization contributing to improved performance. The host reported, "The target price was raised from 170,000 won to 200,000 won. Third-quarter earnings are expected to exceed market expectations."

In August, international passenger numbers increased by 10% year-over-year, reaching an all-time high, while air cargo also rose by 9% due to increased semiconductor and data center shipments. A weaker exchange rate leads to reduced dollar-denominated costs such as aircraft lease payments and maintenance fees, positively impacting airline profitability.

The host explained, "From an airline's perspective, a stronger won is quite advantageous. This is because there are many expenses paid in dollars, such as airfare, aircraft lease payments, and maintenance."

Fuel costs account for approximately 30% of revenue, but foreign currency-denominated expenses are over 50%. Therefore, the cost savings from a weaker exchange rate are greater than the increase in oil prices, leading to an expectation of strong third-quarter earnings for major airlines.

The host emphasized, "It is said that the effect of a weaker exchange rate is more important than rising oil prices. Simply put, the effect of overall cost reduction due to the falling dollar is greater than the burden of slightly rising oil prices."

Korean Air possesses strong cargo competitiveness in addition to passenger services. With the merger with Asiana Airlines, its market capitalization has risen to among the top 20 global airlines, making it an airline stock of a size that foreign investors can choose. This change has led to an increase in foreign ownership by over 8 percentage points.

The host explained, "That was Korean Air. Its strength is not only passenger but also strong cargo competitiveness. With the merger with Asiana Airlines, its market capitalization has risen to among the top 20 global airlines, making it an airline stock of a size that foreign investors can choose."

The practical effectiveness of FPV drones and Shahed drones has been proven in the Ukrainian battlefield, and the efficiency of long-duration surveillance and targeting via U.S. MQ-9 Reaper drones has also been confirmed. Manager Kim Min-sung said, "Ultimately, the important thing is that drones are not replacing existing weapons but creating a new weapon market on the battlefield."

This strategy is expected to drive the co-growth of the drone-related components market, including sensors, radar, communications, and engines.

Manager Kim Min-sung explained, "On the high-performance side, they are developing CCAs, or Collaborative Combat Aircraft. Conversely, on the low-cost side, the strategy is to acquire a large number of small drones."

Key beneficiaries of K-defense unmanned weapon systems include Korea Aerospace Industries, Hanwha Systems, and Hanwha Aerospace. Korea Aerospace Industries is expected to play a central role in the systematic development of future domestic collaborative combat aircraft projects. Hanwha Systems has strengths not only in sensors and data links for drones but also in 'Cheongwang,' a laser anti-drone system for intercepting drones. Hanwha Aerospace is solidifying its position in the unmanned weapon market through the development of drone engines and the 'Arion-SMET' multi-purpose unmanned vehicle.

Manager Kim Min-sung analyzed, "In future domestic collaborative combat aircraft projects, along with Korean Air, it is expected to play a central role in this system development. Hanwha Systems is a company with strengths not only in sensors and data links for drones but also in catching drones."

Duksan Electera, a subsidiary of Duksan Tecopia, officially launched its North American electrolyte business by commencing commercial supply of electrolytes to North America's largest EV manufacturer, Company A (presumed to be Tesla), starting in July. It has confirmed supply agreements with seven customers in North America and aims to expand to nine next year. The establishment of a non-Chinese supply chain through vertical integration of electrolyte additives and electrolyte production is acting as a key competitive advantage.

Manager Kim Min-sung stated, "They have begun commercial supply of electrolytes to North America's largest EV manufacturer, Company A. Company A here is currently presumed to be Tesla."

Local production is essential due to the volume and logistics cost characteristics of electrolytes, and Duksan Tecopia has achieved vertical integration from electrolyte additives to Duksan Electera's local North American electrolyte supply. This allows it to respond to global companies' demands with a non-Chinese supply chain from raw materials to finished products, emerging as a key competitive advantage.

Manager Kim Min-sung emphasized, "There are not many non-Chinese electrolyte companies that can produce directly in North America, and Duksan Tecopia has vertical integration, supplying electrolyte additives through Duksan Electera's local North American electrolyte supply. This means they can respond with a non-Chinese supply chain from raw materials to finished products, which is emerging as a key competitive advantage."

Duksan Tecopia currently supplies electrolytes to LG Energy Solution, SK On, and Tesla, and its customer portfolio is likely to expand. The partnership with Tench also opens up possibilities for cooperation with Chinese battery companies. Global corporate representatives from Ford and CATL attended the recent factory completion ceremony, indicating a high possibility of expanding customers to Chinese companies such as Ford, CATL, Gotion, and AESC in the future.

Manager Kim Min-sung also reported, "There was also an analysis from the Telegram group head that future customers are highly likely to expand to Chinese companies such as Ford, CATL, Gotion, and AESC."

The U.S. Treasury plans to double its long-term Treasury buyback program, purchasing at least $4 billion more. This is expected to supply liquidity to the Treasury market and lower long-term Treasury yields. Falling Treasury yields will positively impact the stock and crypto markets, particularly raising expectations for an increase in growth stock multiples.

Manager Kim Min-sung explained, "The U.S. Treasury Department is talking about doubling the size of its long-term Treasury buyback program, planning to buy at least $4 billion more in long-term Treasuries. If liquidity starts to be released into the Treasury market, it could lead to an expansion of liquidity by driving down long-term Treasury yields."

Recently, increasing long-term interest rates have led to economic warning signs, increasing downward pressure on long-term rates. This factor raises expectations for a recovery in multiples, especially for growth stocks. In particular, the biotech sector, which has been recently overlooked by the market, is excessively depressed ahead of important events, making it highly likely that these factors will act as catalysts for an upward movement.

Manager Kim Min-sung emphasized, "I believe that being depressed ahead of events can actually be a trigger for an upturn, so even though it's down today, we need to pay attention to biotech again, as triggers could be activated this week."

This technology induces cancer cell death and immune cell activation, making it a representative stock with significant potential for global multiple expansion due to the rarity of its technology. Additionally, it is analyzed to have completed消化 overhang risk and entered the initial phase of a trend rebound.

Manager Kim Min-sung stated, "Given that this company has globally established the first RNA trans-splicing enzyme vector-based platform, the rarity of this technology alone makes it one of the representative stocks with the potential for significant global multiple expansion."

Manager Kim Min-sung said, "If a rebound occurs at the current level, I will present a first target price of 42,000 won and a stop-loss line of 26,000 won, so please refer to the price strategy to set your corresponding action line."

TCK has garnered market attention by recording a high return of 99.1% since its introduction in late July. Manager Kim Min-sung judged that TCK has ample room for further growth, considering the semiconductor multiple cycle and the process of index normalization. Technically, the trend has not broken and continues to move upwards.

Manager Kim Min-sung stated, "I believe TCK will continue to have additional upside potential. Even technically, the trend has not broken and continues to move upwards."

Manager Kim Min-sung added, "I would say that a third target price of up to 314,000 won is possible. Since it has risen a lot, I recommend managing risk with a strategy of taking profits if the 240,000 won line is breached."