Focus on KOSDAQ Small/Mid-Caps, Not Large-Caps

Amidst this volatility, an analysis suggests that stock groups that showed a sharp rebound and recovered quickly after 2 PM are likely to become the market's leading sectors for the time being.

Unlike the first half of the year, Samsung Electronics and SK Hynix saw lower returns as market supply and demand became more dispersed.

Investors who currently hold these stocks at 30% to 50% of their portfolio should maintain a 'hold' perspective.

For those who do not own these stocks, new purchases within 30% can be considered, and Samsung Electronics' estimated PER of 3.7x for next year sufficiently demonstrates its valuation appeal. However, holding more than 50% may not be rewarding in terms of returns, so it needs to be adjusted according to investment inclination.

Today, semiconductor material and component stocks like Jusung Engineering showed strength, hitting new highs.

CEO Lee Ju-hyun explained that institutional buying at present might be mechanical due to ETF rebalancing, making it crucial to check supply and demand next week before deciding on further purchases. For existing holders, a 'hold' strategy is recommended.

Although net income was sluggish due to non-operating expenses and exchange rate effects, the strong operating profit, a key indicator, suggests maintaining a positive outlook on the secondary battery sector.

As the proportion of secondary batteries in individual investors' portfolios has served as a market defense, continued interest in the secondary battery sector, with high expectations for performance improvement next year, is required. Samsung SDI's current earnings are likely to exceed expectations.

The proportion of secondary batteries in individual investors' portfolios has recently played a role in market defense, and continuous interest is needed due to expectations of performance improvement next year. In particular, Samsung SDI's earnings this quarter are likely to exceed expectations.

Secondary battery material companies need to lower their earnings expectations for this quarter due to exchange rate issues and falling lithium prices.

Although the pace of performance improvement for these companies is expected to be slower than that of cell companies, a gradual recovery is anticipated from the fourth quarter, with full-fledged growth projected from next year.

Both Samsung SDI and LG Energy Solution are expected to see increased ESS orders in the second half of the year, and particular attention should be paid to the domestic third central ESS bidding event.

LG Energy Solution set its ESS target at 90GW for this year and achieved 30GW in the first half, yet did not revise its target, which can be interpreted as strong confidence in its ESS business.

LNF is the only company that can procure non-Chinese LFP cathode materials in the US, with expectations of external growth of 100,000-140,000 tons in shipments next year. POSCO Future M has also signed a large-scale supply contract with Samsung SDI. Now is the time to invest in the future direction of performance improvement rather than current financial statements.

LNF is recognized as the only company capable of procuring non-Chinese LFP cathode materials in the US, with expectations of external growth of 100,000-140,000 tons in shipments next year.

POSCO Future M continues its growth by signing a large-scale supply contract with Samsung SDI. For these two stocks, now is considered a time to invest in the direction of future performance improvement rather than current financial statements.

The Dutch ruling is under appeal due to a lack of grounds from Halozyme, and in light of past lawsuit cases, it is regarded as a repeated lawsuit without substantial grounds. Therefore, the analysis suggests it is reasonable to view this as short-term noise.

Alteogen's sharp decline appears to be largely influenced by the market's overreaction to pharmaceutical/bio sector noise and psychological factors, when compared to the stock price volatility of its competitor, Halozyme.

This is judged to be a temporary phenomenon due to worsening investor sentiment rather than an issue with the company itself, and confirmation of the 240,000 won support level is needed.

Currently, the KOSDAQ market is significantly stronger than the KOSPI market, and during the market rebound, KOSDAQ rebounded first and more strongly.

This is primarily due to the leading rise of semiconductor material and component stocks, but for the KOSDAQ to maintain its overall upward momentum, a concurrent rise in the secondary battery and bio sectors is essential.

Recently, a series of noises from pharmaceutical and bio companies like Peptron and AprilBio have dampened investor sentiment.

While some stocks (G2G Bio, Olix) have started to turn around from the bottom, a broader recovery in investor sentiment requires a sharp short-term interest rate drop or major triggers like license-out agreements expected from pharmaceutical and bio platform companies in the fourth quarter.

Compared to peer companies like Wonik IPS, no issues have been found that would lead to a negative view of the current stock price.

This suggests there are no particular issues to view Jusung Engineering negatively, and it's worth referencing the trends of peer companies like Wonik IPS.

It is currently unclear whether the strong rebound in semiconductor material and component stocks is a temporary phenomenon due to ETF rebalancing or signifies a cycle shift from P to Q.

Therefore, rather than aggressive portfolio expansion or new purchases, it is wise to decide on buying after confirming the supply and demand situation next week. Existing holders should maintain a 'hold' strategy.

Top-tier market capitalization companies like Jusung Engineering are expected to maintain a solid direction. However, among other semiconductor material and component companies, post-process companies are starting to gain attention compared to front-process companies that showed strength in the first half.

Large-scale expansion investments by global companies tend to focus on post-processing, which is highly likely to lead to tangible benefits.

Accordingly, a post-processing-centric response is currently considered an effective investment strategy.

Although some recent order announcements related to glass substrates confirm a production base, it will take time to see substantial results.

Confirmation of a clear purchase intent from end-users like AMD is key to investing in glass substrates, and delays in mass production or target dates set for 2028-2030 by major companies like Samsung Electro-Mechanics and SKC should also be considered.

Currently, the glass substrate industry is recommended to be approached from an issue play or short-term trading perspective rather than fundamental investing.

Investors interested in glass substrates would benefit from a strategy that also considers existing substrates, as glass substrates share similar processes with them.

Since the existing substrate industry itself is in good shape, it is important to pay attention to substrate stocks regardless of glass substrate development.

It's also worth considering that half of the existing substrate process is related to substrates, and the process is similar to that of HBF substrates.

As the KOSPI broke below the 60-day moving average, aggressive bargain hunting should be avoided until recovery next Monday is confirmed. Until supply and demand stabilize, a portfolio strategy focused on KOSDAQ small and mid-cap stocks or renewable energy sectors with clear momentum is effective.

Until KOSPI supply and demand stabilize, aggressive bargain hunting should be avoided, and the recovery next Monday following the KOSPI's breach of the 60-day moving average should be closely monitored.