Korean Stocks Rise on SK hynix Shareholder Return Policy and Weaker Exchange Rate; Bio and Semiconductor Sectors in Focus

This is analyzed as a key factor that will support the downside of the domestic market for the time being. The won/dollar exchange rate has also hit its lowest level of the year, further improving conditions for foreign capital inflows. Foreigners' cumulative net selling from January to July totaled 165 trillion won, so the burden of additional selling has eased.

The 35,000-ton capacity it can currently produce is already fully sold out under long-term supply contracts, and additional expansion is underway with completion targeted for 2029. Based on this positive outlook, the target price has been raised to 330,000 won.

Expectations for its shareholder return policy are growing accordingly. The likelihood of shareholder returns using the company's surplus cash is rising, and considering this, the target price has been set at 1,550,000 won.

The bio sector is rising on news of Moderna's successful Phase 3 trial. Moderna announced positive results from a Phase 3 trial combining Keytruda with its mRNA therapy, which drove a joint rally in domestic mRNA-related stocks. In addition, the difference between therapies that produce proteins and those that block existing proteins is having differentiated effects on share prices, forming a positive trend across the sector beyond individual catalysts.

In addition, expectations of looser regulation following the appointment of an FDA commissioner are also having a positive effect on the bio sector.

In response, trading volumes of major cryptocurrencies such as bitcoin rebounded together, drawing a positive market reaction.

The stablecoin CLARITY Act is set to move forward again for passage in September, and it is expected to accelerate institutional investor inflows into RWA (real-world asset) trading. In addition, as expanded Treasury bond purchases raise the likelihood of lower long-term Treasury yields, the stablecoin market as a whole is expected to benefit.

SK hynix announced a plan to buy back and cancel 40 trillion won worth of its own shares, which had a positive impact on the domestic market. This reconfirms the effect that large-scale shareholder return policies have on foreign capital flows and the exchange rate, as seen when Samsung Electronics bought back 10 trillion won worth of its shares in November 2024. Such shareholder return policies by semiconductor companies are working as an important factor that revitalizes the market.

Roughly 300 trillion won in additional shareholder return policies is anticipated, and this is expected to induce won strength and play an important role in improving the foreign capital environment for semiconductor stocks. As a result, these policies are expected to have a positive ripple effect across the domestic stock market as a whole.

As adoption of 800V products within AI data centers increases, demand for silicon carbide heat-dissipation materials to control heat is surging. As a company that manufactures such heat-dissipation materials, Costecsys achieved a return to profitability in the first half of this year, and it can expect even greater growth next year thanks to base effects.

Accordingly, the initial target price is set at 22,500 won, the upper end of its recent short-term trading range. A stop-loss is set at 16,000 won, so risk management is needed.