Samsung Shares Fall Despite Shareholder Returns as Rate Hikes and Nvidia-Driven Noise Grow

Market reaction has been cold despite Samsung Electronics' shareholder-return policy announcement. This is because momentum to drive the share price higher is lacking as earnings growth slows. The market expects concrete shareholder-return plans to come only around October, so analysts say it is hard for them to serve as a short-term share price driver.

Jae-ki Min, team leader at KB Securities' PRIME CLUB, said, "The market expects concrete shareholder-return details to come around October," explaining that the pushed-back timeline is the cause of the lack of momentum.

Both Samsung Electronics and SK hynix have seen earnings estimates stay flat or even turn slightly lower since their Q2 results. This contrasts with the period when shares surged on past earnings, suggesting that the absence of earnings momentum is weighing on share prices.

Team leader Min said, "After the Q2 results were released, earnings estimates for both Samsung Electronics and SK hynix have not moved at all and are even slightly trending down," stressing the current contraction in earnings-based investor sentiment.

Market participants say they could consider buying the dip if the price-to-book ratio (PBR) falls below 1x, but for now the mood is to wait and watch with the possibility of further declines in mind rather than aggressively buying. Analysts say investors are placing more weight on the view that "there must be a reason it still won't rise despite this."

Kim Young-ryong, a department head at Shinhan Asset Management's SOL ETF, said, "Even with big positives like this, it isn't rising. It seems people are placing more emphasis on 'there must be a reason it still won't rise' rather than viewing it as a contrarian buying opportunity."

Major tech stocks are moving in trading ranges, requiring investors to respond cautiously. Samsung's upper resistance level has been clearly confirmed, and the stock is now searching for its lower support level. Kim Min-su, CEO of Lemon Research, explained that the upper range resistance was set after the view to "trim around 285,000 won" came up twice. Investors should avoid hasty trades that lead to losses and prepare for increased volatility once energy has built up.

Such large-scale fundraising is read as liquidity contraction and triggers a decline in investor sentiment across tech stocks. CEO Kim said, "As funds are raised, people will interpret it as liquidity being absorbed," stressing that it should be read as a negative. Combined with the high-rate environment, this is acting as a factor that checks the rally in tech-centered markets.

He stressed that rising rates are functioning as a real burden on the market, and that attention should be paid to shifts in rate policy after the midterm elections between September and November. Since policy changes in this period could significantly affect the market, investors should closely watch the rate trend and build their response strategies.

Nvidia has raised server prices by 15%, increasing the burden on its customers. This cost-pass-through strategy could accelerate efforts by large customers such as Google to reduce their dependence on Nvidia and speed up development of their own chips (TPUs). CEO Kim said, "Depending on Nvidia is becoming an ever-growing burden in some respects," and predicted that moves to replace Nvidia in the application-specific semiconductor (ASIC) market could accelerate.

Major chipmakers including Samsung Electronics and SK hynix are currently trapped in trading ranges amid an institutional-investor adjustment phase. CEO Kim said, "Now it's a story of an institutional adjustment range," predicting that short-term Nvidia momentum alone will struggle to break through this range resistance. In other words, without a strong driver to lead the market, analysts say share prices are hard to expect to rebound on Nvidia-related news alone.

He judged that the situation differs from the past, when the market rose steadily, and that a more cautious approach may be required after September and October. He said, "This is a phase where you have to tap the stones carefully as you cross the river," revealing that he is monitoring the market cautiously.

LG Energy Solution is reportedly seeking import bans and sales orders against Chinese companies including EV Energy. This issue arose from competition with Chinese firms rapidly chasing Korean companies, and the news could significantly affect the secondary-battery market.

On this news, CEO Kim focused on Tesla's moves and said, "Even as they keep chasing Korean companies rapidly, it's a big news item in my view." Given that Tesla uses a high proportion of cylindrical batteries, this patent investigation could be a key variable for the share prices of related companies. The impact is already appearing in the share prices of Chinese EV makers, so attention is focused on how this will unfold.

He forecast that if Hyundai Motor Group builds expectations for a robot value chain alongside its EV mass-production plans, demand for batteries could rise, and in the long run, discussion of all-solid-state batteries could follow.

However, the core auto business is viewed negatively due to low growth and intensifying competition, so investors should focus on whether the company offers a concrete vision for new growth engines such as robotics.

In the past, expectations at trade shows caused brief spikes and drops, but interest is now growing in who will start mass production first from a practical commercialization standpoint. CEO Kim said, "In the past, on who starts mass production of all-solid-state batteries, the stocks would rise briefly with expectations at each trade show and then fall, but now we are approaching a time when we need to watch it more closely," stressing the need to focus on companies with practical technology and commercialization capability.

CEO Kim explained that its shares are lagging because "SK Innovation's momentum is somewhat weaker than the two companies I mentioned earlier" in terms of secondary batteries. However, compared with energy-company share price moves tied to the international situation, analysts also see SK Innovation's refining and energy business as having valuation appeal. Given that refining companies such as U.S.-based Valero are hitting record highs, there is also a possibility of re-rating the value of SK Innovation's core business.

The improvement in cosmetics stocks' export performance may reflect the effect of inventory building. CEO Kim explained that companies tend to stock up first when exports are strong and then sell in the third and fourth quarters, so earnings tend to be front-loaded to the year's middle and weaker later. Depending on whether inventories are replenished after being depleted, earnings can swing sharply.

Therefore, investing in cosmetics stocks requires close scrutiny of inventory cycles and rising price competition among brand companies rather than short-term export data. If price competition intensifies, profitability could deteriorate, so caution is needed.

As the chip industry falters, institutional investors are turning to cosmetics stocks. Team leader Min said, "Semiconductors were the big brother, and now that they've faltered a bit, people seem to be looking at the next good export names and turning to cosmetics a lot." Institutional investors are actively trading cosmetics stocks to fill the gap left by semiconductors, and buying intensity is particularly high in ODM/OEM companies.

This spread of flows is extending to large-cap stocks such as Amorepacific. Investors should therefore watch whether cosmetics stocks can serve as an alternative investment destination until the chip industry recovers.

This reflects the trend of large cosmetics companies expanding into functional product lines such as hair-loss care as the traditional color-cosmetics market approaches saturation. Although their share of total sales is still small, they are receiving positive assessments for growth potential and are expected to become a major trend in the cosmetics market.