Doosan Enerbility Eyes US Nuclear Market

Analyst Yeom Seung-hwan said that the KOSPI is going through short-term supply and demand instability due to foreign selling, but corporate earnings and profit growth matter more than supply and demand as the main driver of gains.

Third-quarter earnings for S&P 500 companies are projected to rise 29%, and with strong September export data, the earnings of major Korean companies are also showing a positive trend. Based on these earnings, Yeom expects stock prices to rise not as a one-off gain but in a sustained upward trend, with profits continuing to grow into next year.

Market concerns over the end of share buybacks are excessive. The fundamental driver of stock prices is corporate earnings and growth potential.

As the case of SpaceX shows, even as supply increases, stock prices rise if corporate growth potential supports them. Share buybacks serve only to defend prices in the short term and are not the fundamental growth driver.

Instead, the return of foreign investors is the most important variable for a higher stock price level, and stabilizing interest rates could be a signal of that return, he said.

The end of the election removes market uncertainty. Looking at the 19 US midterm elections since 1950, stocks rose without exception in the year after the vote, with an average return of 15%.

Yeom said that the end of the election itself is an important opportunity to resolve market uncertainty, opening the way for the market to rise.

Unlike biotech, these sectors show their results in numbers, and they are leading KOSDAQ's rally.

Secondary batteries are tied to energy storage system (ESS) demand from AI data centers, and semiconductor materials and parts are benefiting from expanded facility investment at Samsung Electronics and SK hynix. This earnings-backed, sector-led market momentum is unlikely to fade for now.

The semiconductor sector's share of KOSDAQ's market capitalization ranking has risen sharply, expanding its weight in the market.

The semiconductor cycle is the key to KOSDAQ's direction. A sustained recovery in the industry will be a positive driver for the market.

Micron expects semiconductor supply shortages to continue through 2028. Samsung Electronics' third-quarter operating profit is forecast at 108 trillion won, but the timing of supply shortages mentioned at its earnings briefing will be the variable that determines the stock's future.

Micron projected that semiconductor supply shortages will persist through 2028, and said that comments on the timing of supply shortages at Samsung Electronics' upcoming earnings briefing will be an important factor in determining the direction of the stock.

Data center investment by US big tech companies is currently driving semiconductor demand.

Checking every quarter whether big tech companies such as Google and Amazon are cutting AI-related spending is an important leading indicator for the chip industry. Also, the rise in DRAM lead times from a normal 8 weeks to 20 weeks shows that the semiconductor supply shortage is deepening.

Samsung Electronics Co.'s electro-mechanics affiliate, Samsung Electro-Mechanics, is strengthening its position by maintaining an oligopoly in MLCCs and high-performance substrates (FC-BGA).

Its price-to-earnings ratio of around 70 has drawn valuation concerns, but high growth potential more than offsets this. However, since the stock has already risen considerably, he suggested approaching it as a holding for existing investors rather than making new purchases.

Doosan (Doosan Electronics BG), which produces CCL (copper-clad laminate), the raw material for substrates, and Daeduck Electronics, which holds FC-BGA technology, are expected to benefit. Demand for semiconductor back-end equipment is also expected to rise along with data center expansion.

He recommended paying attention to companies such as Doosan (Doosan Electronics BG), which produces CCL (copper-clad laminate), the raw material for substrates, and Daeduck Electronics, which holds flip-chip ball grid array (FC-BGA) technology. The growing demand for semiconductor packaging equipment also needs close watching.

Investors should pay attention not only to CCL and flip-chip BGA substrate makers but also to back-end process equipment companies. Semiconductors must go through packaging and substrate connection processes to function, so experts stressed that the related equipment industry deserves attention. Because back-end equipment includes many stocks, investors are advised to search and verify them directly.

Executive Director Yeom Seung-hwan recommended studying CCL and flip-chip BGA substrate makers as well as semiconductor back-end equipment companies. He advised direct searching for verification since there are many back-end equipment stocks.

The lecture aims to help investors manage their portfolios efficiently.

Korean nuclear technology's entry into the US market is a concrete growth opportunity for domestic nuclear companies.

Even as the electric vehicle market slows, growth in energy storage systems (ESS) stands out. Executive Director Yeom Seung-hwan said this segment could become a new growth driver for the secondary battery industry.

After President Trump signed an executive order, the US has tightened its stance on removing Chinese power equipment, so Chinese ESS are likely to lose ground. This shift is expected to give domestic secondary battery companies a windfall, and next year the secondary battery sector is projected to rank near the top of all industries in profit growth.

Samsung SDI has a smaller market capitalization than LG Energy Solution, so its share price is more volatile. In particular, its stock is expected to react sensitively to changes in the ESS market.

Robotics business earnings are expected to take about two years to become visible, and robotics stocks are currently weak.

However, the Hyundai Motor Group is preparing mass production of robots through Boston Dynamics and plans to deploy robots in manufacturing processes. Hyundai Motor and Kia are undervalued despite steady market shares. Attention should be paid to actuator makers, which supply key robot components.

Samsung Heavy Industries, by contrast, has the advantage of its 100% FX hedging policy, which can effectively buffer earnings volatility even when the won strengthens. Hyundai Heavy Industries leads in growth potential, while Samsung Heavy Industries leads in earnings stability.

AI semiconductors and power equipment sectors are the core of the bull market, and investors were advised to keep them in their portfolios over the medium to long term.

Securities stocks, whose prices fell sharply, are viewed as a buying opportunity ahead of next year, while Hyundai Motor Group stocks and robotics stocks, with low current interest, can serve as contrarian investment opportunities. Executive Director Yeom Seung-hwan proposed an allocation strategy of 20% cash, 50% core assets (AI and power), and 30% other growth stocks (securities, shipbuilding, and robotics).

Executive Director Yeom Seung-hwan stressed the importance of always keeping 20% of the portfolio in cash. He recommended allocating 50% to core assets such as semiconductors and power equipment, and spreading the remaining 30% across securities, Hyundai Motor Group stocks, and robotics and shipbuilding.

He particularly suggested including the shipbuilding sector in the portfolio, reflecting expectations of cooperation tied to US demand for ships.