Domestic Stock Market Rises on Foreign and Institutional Buying

While the New York stock market was closed for Labor Day overnight, the domestic stock market yesterday closed higher, driven by strong net buying from both foreign and institutional investors. With the announcement of OpenAI's new model, expectations for the AGI era grew, leading to strong movements in related semiconductor stocks, spearheaded by the top two. Accordingly, interest in today's market strategy is rising.

PSK Holdings is a leading player in the semiconductor post-process sector, mainly producing reflow and discom equipment. It began to be targeted in mid-August when semiconductor investment sentiment weakened, and has since recorded a V-shaped rebound, showing an upward trend for two consecutive days. Although it formed an upper wick yesterday, this is interpreted as part of the process of breaking through resistance at the 160,000 won level. Further upside to new high territory is expected, and while the second target price was presented at 170,000 won, it could reach new highs with expectations of an earnings turnaround.

Unlike the subdued movements of semiconductor materials, parts, and equipment (Sobu Jang) until now, strong movements are now appearing in both the front-end and back-end process sectors. PSK Holdings is also expected to surpass its previous high of 170,000 won even if a correction occurs, thus a holding strategy up to the second target price of 170,000 won remains valid. This is not the final target price, and there is a possibility of rising to new high territory with expectations of an earnings turnaround.

Recently, various issues related to nuclear power have emerged, including news of investment in the U.S., a tentative confirmation, and collaboration between Elon Musk and Doosan for power plants. In particular, a U.S. investment in a Texas gas power plant is highly probable, and rumors of Westinghouse acquisition have also surfaced. While gas turbines and nuclear power plants are not directly related, Doosan Enerbility possesses both business areas, positively impacting the overall nuclear power sector. Additionally, news of the construction of 8 new nuclear power plants in the U.S. continues to drive strong momentum in the sector.

With rumors of Westinghouse acquisition and news of building 8 additional nuclear power plants in the U.S., the nuclear power sector showed strong momentum. While the Texas gas power plant is related to gas turbines, Doosan Enerbility is gaining attention as a related stock due to its involvement in both gas turbine and steam turbine businesses. Nuclear power generation, which uses steam turbines to produce electricity from thermal energy, operates on the principle of boiling water to produce steam through uranium fission. News of the establishment of 8 additional nuclear power plants in the U.S. at the last minute reignited the nuclear power sector's strength.

Energy R&D budget within the government budget has been significantly increased, with plans for concentrated investment in Small Modular Reactors (SMRs) and nuclear fusion technologies. In addition, Elon Musk's remarks are also positively affecting the nuclear power sector. Companies related to power plants, such as gas turbines and steam turbines, are expected to once again receive a boost, making this a critical time to pay attention.

Korea Electric Power KPS specializes in the maintenance and repair of power generation facilities. Just as important as building new nuclear power plants or power plants is maintaining, repairing, and servicing existing aging facilities, and Korea Electric Power KPS handles this role. When Doosan Enerbility constructs and manufactures gas turbines, Korea Electric Power KPS has a cooperative relationship where it is solely responsible for their maintenance.

Korea Electric Power KPS is expanding its business beyond nuclear and power generation facilities to include renewable energy facilities such as solar and wind power. This means it is a company that can benefit from the renewable energy sector. Maintenance is an essential element in the energy facility sector, and after direct construction companies move, maintenance companies also need to be watched.

Despite being an affiliate of KEPCO and KEPCO KPS, Korea Electric Power KPS has shown relatively little movement when the nuclear power market moved recently. However, yesterday, after a long period of sideways trading, it showed signs of breaking through the upper resistance of its trading range. If demand comes in today, it is expected to surpass the upper bound of the range and achieve further gains. In the June market, it also formed a long-wicked bullish candle, indicating a possibility of rising again by digesting that resistance. A strategy of holding for mid-to-long-term momentum rather than short-term gains is effective, with a first target price of 55,000 won and a stop-loss price of 42,000 won.

With the analysis of the first sector, nuclear power, and the strategy for Korea Electric Power KPS, an affiliate of KEPCO's power generation subsidiaries, completed, we will now look at the second sector, the semiconductor market. Recently, with the launch of GPT Astra, interest in AI has increased, leading to strong performance in semiconductor leaders and Sobu Jang, with Samsung Electronics and SK Hynix rising by 5% and 8% respectively. This positive momentum is expected to continue for some time. The news that AI can score perfectly on the Suneung (college entrance exam) further raises expectations for AI technology development.

Yesterday, semiconductor supply and demand showed a very strong trend, and Samsung Electronics and SK Hynix also recorded strength. Driven by 5 trillion won in net buying from foreign and institutional investors, the KOSPI approached the 7,000 point threshold. Goldman Sachs still maintains its 12,000 point target for the KOSPI, stating it is undervalued. This is due to the forecast that the memory semiconductor boom will last longer than expected.

News that Samsung Electronics has only 10 days' worth of memory supply remaining indicates a shortage relative to increasing demand. As increasing production immediately is difficult even with factory expansion, the supply shortage effect is expected to persist. Accordingly, a significant increase in Q3 or this year's revenue is anticipated. Not only in the memory market, but also in the non-memory sector, a shortage of Samsung Electro-Mechanics' MLCC (Multi-Layer Ceramic Capacitor) has occurred, with news that operating profit this year will reach 2 trillion won. Japan's Murata is also experiencing a shortage, and Samsung Electro-Mechanics, with the second-largest domestic market share, is also showing strong momentum.

Shortages are occurring not only in memory but also in non-memory, particularly in substrates, necessitating continued attention to related semiconductor material, parts, and equipment (Sobu Jang) companies. Accordingly, Samwha Capacitor, an MLCC-related company, was introduced as today's target stock. Samwha Capacitor, specializing in manufacturing and supplying capacitors, was cautiously mentioned as potentially playing a leading role in the domestic MLCC market, following Samsung Electro-Mechanics.

The expectation for Samwha Capacitor to take a leading role stems from the significant increase in MLCC demand across various fields such as white goods, power grids, smart electric vehicles, and AI data centers. In particular, it specializes in manufacturing aluminum and film capacitors, holding a high market share. MLCC sales are increasing with the rise in PC and smartphone demand, and with the recent unveiling of Tesla's Robotaxi and the rapid increase in EV sales, demand for automotive MLCCs has also surged.

MLCC demand is explosively increasing, especially with the expansion of the AI server and AI data center industries and power infrastructure. While tens to over 100 MLCCs are used in general PC DDR5, tens of thousands are required for AI servers. This means that current production capacity will struggle to meet demand for some time, and the shortage is expected to continue. Samwha Capacitor is showing significant growth by expanding MLCC sales for automotive applications beyond IT.

As IT demand recovers and the electric vehicle market grows rapidly, Samwha Capacitor's MLCC production and expansion are increasing, raising expectations for revenue growth. In the past, when Murata showed strength in the MLCC market, not only Samsung Electro-Mechanics but also Samwha Capacitor recorded a sharp rise in June-July. Although it underwent a correction after July, it is now showing a V-shaped rebound after hitting a low, indicating a transition to an upward trend.

After a V-shaped rebound, Samwha Capacitor has established itself at the top of its trading range, raising its lows, and is nearing a golden cross line with the 60-day moving average secured. Although it is a heavy stock, if viewed over the long term, significant momentum is expected. This time, not only the memory boom but also MLCC in the non-memory sector is expected to lead and drive the stock price. Having settled on the 20-day moving average, if trading volume accompanies it, a long bullish candle could form, marking the third finale. The first target price is set at 140,000 won, and the stop-loss price at 100,000 won.

With the bottleneck phenomenon of MLCC, often called the 'rice of semiconductors,' intensifying, Samwha Capacitor has been suggested as a target stock. It is recommended to respond with a target price of 140,000 won and a stop-loss price of 100,000 won. Both stocks have been delivered, and real-time strategies can be confirmed by searching 'Kim Heung-tae' on Naver Band.