Market Concentration on Samsung Electronics and SK Hynix Due to Shareholder Return Expectations... Kakao's Spin-off Perceived as 'Another Split Listing'

Analysts anticipate operating profits for semiconductor companies next year to range from 300 trillion to 400 trillion won, based on the premise that semiconductor prices will rise by an average of 15% to 20% due to advancements in HBM (High Bandwidth Memory) technology. Given that this year's operating profit is expected to remain at 260 trillion won, this consensus reflects considerable optimism.

However, caution is advised as investor disappointment selling may occur if actual operating profits fall below expectations.

Samsung Electronics' operating profit is projected to reach 300 trillion won this year and 500 trillion won next year. If Samsung Electronics announces a shareholder return policy lower than SK Hynix, questions may arise among investors.

This is a difficult point to explain, as Samsung Electronics possesses enormous free cash flow, yet a lower shareholder return ratio than Hynix. The market is watching whether major investment announcements, such as M&A, can offset any perceived inadequacy in the shareholder return policy.

Looking at SK Hynix's case, share buybacks had the effect of boosting the stock price in the short term. However, analysis suggests that once buybacks end, it becomes difficult to secure additional momentum for stock price increases, making it uncertain whether investor buying will be sustained.

The center director assessed that because SK Hynix's stock price had risen to a certain extent through share buybacks, it is uncertain whether it can create additional upward momentum from this point.

Samsung Electronics is also likely to follow a similar pattern. While shareholder return policies may have a short-term stock price boosting effect, fundamental improvement is essential for long-term corporate value enhancement.

The strength in Samsung Group stocks is analyzed as a supply and demand concentration phenomenon driven by expectations for events such as special dividends or share buybacks and cancellations, rather than fundamental changes in corporate value. Investors are perceived to be swayed by such simple trend-driven movements based on ownership structure.

Analyst Kim Jang-yeol pointed out that because the size of special dividends or share buyback/cancellation plans has not yet been finalized, investors' sentiments towards Samsung Electronics stock will differ. It is necessary to closely observe the stock price movement after such event-driven buying subsides.

The market's movement today was confirmed as a rise driven by shareholder return expectations centered on large-cap stocks like Samsung Electronics, rather than a general surge in the semiconductor sector. This analysis is supported by the fact that semiconductor material, component, and equipment (SooBujang) stocks did not show an upward trend, and the U.S. semiconductor market generally showed weakness.

The center director noted that the market's movement today, driven by the specific theme of shareholder returns, was confirmed by the absence of a rise in SooBujang stocks. This indicates that the market reacted to event-driven factors in large-cap stocks rather than fundamental improvements in a specific sector.

The decline in the stock prices of semiconductor SooBujang companies is attributed to the fact that Samsung Electronics and SK Hynix have not announced large-scale investments, meaning there is no reason for these companies to rise together. In other words, while large-cap stocks focused on shareholder returns, SooBujang companies failed to secure additional growth momentum.

Furthermore, the possibility cannot be ruled out that the stock price decline of some SooBujang companies was negatively affected by individual stock fundraising issues, irrespective of earnings announcements.

Komico's trading was halted on July 29 for a stock split, which coincided with a period when the market sharply declined and then recovered, leading to observations that investors missed opportunities for stock price gains. Analyst Jang Woo-jin reminded that the market was in a full nosedive at the end of July, explaining this discrepancy.

Kakao announced that its board of directors resolved to spin off KakaoTalk and Kakao AI divisions to attract external investment and enhance the value of its AI business. This move appears to aim at transforming from a messenger platform to an AI company.

However, Kakao has a history of diluting the equity value of existing shareholders by listing subsidiaries through multiple previous spin-offs, leading to widespread distrust and disappointment among shareholders. There is a strong concern that this current spin-off will also be perceived as 'another split listing.'

In particular, fundamental doubts are being raised about the effectiveness and competitiveness of AI functions within KakaoTalk. Critics question how much the approach of integrating AI into existing messenger services can differentiate itself from AI services on other platforms like Naver or Google. Shareholders are expressing fatigue with repeated spin-off policies and skepticism about corporate value enhancement.

Fundamental doubts are being raised about the competitiveness of KakaoTalk-based AI services. Users tend to enter the messenger for conversations but then use a separate AI chatbot (e.g., GPT), making it uncertain what convenience and utility KakaoTalk's in-app AI features will truly provide to users.

It is also pointed out that while companies like Naver and Google offer high AI accessibility by providing AI answers simultaneously with searches, KakaoTalk has a user interface discrepancy between the existing messenger usage environment and the AI chatbot usage experience.

It was pointed out that shareholder return policies are not a panacea that guarantees an increase in corporate value. While shareholder returns can have a stock price defense effect when a company's fundamentals are weak, they have limitations in driving dramatic surges like 20-30% explosions.

Analyst Kim Jang-yeol emphasized that if shareholder returns always had a positive impact, corporate value should continue to rise after their announcement. However, he pointed out that this is not the reality, suggesting that shareholder returns cannot be applied uniformly to all companies.

It was suggested that if market expectations become excessively high, even if a shareholder return policy is announced, it may fall short of expectations, leading to disappointment selling, thus requiring a cautious approach.

Today, the market saw an intensifying concentration of liquidity towards Samsung Electronics and SK Hynix, leading to the relative marginalization of the Kosdaq market. This is analyzed as a result of limited market liquidity concentrating on specific large-cap stocks, weakening buying sentiment for other stocks.

Analyst Kim Jang-yeol expressed concern that Kosdaq stocks might fall due to the effects of the large-cap stock-driven market. He pointed out that if the marginalization of Kosdaq stocks, primarily invested in by individual investors, continues, the overall health of the market could be undermined.

The outlook suggests that if this large-cap concentration continues, the Kosdaq market may experience further declines, which could cause greater difficulties for individual investors.

In the stock market, the expression 'DekkoBako' refers to a bumpy and uneven adjustment process rather than a one-sided upward trend. It originates from the Japanese word 'dekoboko (でこぼこ)', which describes a shape with repeated convexities and concavities.

Analyst Jang Woo-jin explained that this term is used to describe situations where the market does not rise linearly but shows volatility by repeating ups and downs.

As the market's tendency to concentrate on large-cap stocks and move according to specific themes has strengthened recently, a 'DekkoBako' market is expected to continue for some time.

Doubts are growing about the sustainability of the market rebound as foreign net buying has significantly decreased. After selling 1.8 trillion won yesterday, foreigners net bought nearly 1 trillion won at one point today, but this figure drastically shrank to 300 billion won by market close.

Analyst Jang Woo-jin assessed that, looking at these figures, it is difficult to say that foreigners are 'betting heavily' on the Korean market. This suggests that foreign buying may be short-term 'short covering' rather than a long-term perspective.

Therefore, analysis suggests that foreign net buying may only induce a temporary rebound rather than driving a trend-following market rise.

The main reason for the correction in pharmaceutical and bio stocks is analyzed to be their rapid surge based solely on expectations, without accompanying earnings announcements. Particularly, cases where stock prices double or triple in a short period without data disclosure, such as the Moderna issue, are highly unusual.

Analyst Jang Woo-jin mentioned that such rapid surges need to be watched, pointing out that theme stocks without an earnings foundation are bound to suffer severe damage if liquidity shifts elsewhere.

Ultimately, stock prices formed solely on expectations without fundamental support from earnings are bound to hit a limit, which is interpreted as a phenomenon occurring across the entire pharmaceutical and bio sector.

An announcement was made that Samsung SDI decided to transfer a portion of its Samsung Display shares to Samsung Display. With this sale, Samsung SDI's stake in Samsung Display will be reduced from the existing 15.2% to 10.2%.

The sale amounts to approximately 4.4 trillion won, and Samsung SDI plans to utilize these funds as investment capital for expanding its secondary battery business.

This stake sale can be interpreted as part of a business reorganization within the Samsung Group, and it is seen as demonstrating Samsung SDI's commitment to further focus on its core secondary battery business.

Although the U.S. is expected to announce fiscal consolidation plans, analysis suggests that dramatic changes are unlikely. With the budget already extensively utilized and interest payment burdens increasing, substantive fiscal cuts are difficult.

Analyst Kim Jang-yeol assessed that the announced plans would merely be an 'attempt to show effort' towards fiscal consolidation. This reflects the realistic constraint that the U.S. fiscal situation has structural problems that cannot be resolved by short-term policies.