SoBujang Rotation, Separating the Wheat from the Chaff

It is considering various funding methods, but nothing has been finalized.

This news came amidst a positive market reaction, including a more than 5% rise in SK Hynix ADR, increasing market interest in future funding plans.

Recently, most power equipment stocks have seen their order backlogs filled until 2028-2029, leading to market concerns about additional growth drivers.

However, with large-scale investments like Samsung Group's Helix investment, a paradigm shift is occurring from simple transformer manufacturing to providing total solutions to address power shortage issues.

i3System has signed a 61.8 billion won contract to supply infrared detector assemblies to an overseas defense company. This large-scale order, exceeding half of its annual revenue, is drawing attention amidst a rotational rally in the defense sector.

This is a massive amount, surpassing 50% of the company's annual revenue, making it highly likely to emerge as a distinctive rotational stock within the defense sector.

Infrared detectors are components that sense the heat of people or objects in smoke and are used in thermal imaging cameras, guided missiles, and surveillance equipment, as well as other defense products.

i3System is expanding its production capacity through its Chinese factory, and this order demonstrates its growth potential in the defense sector.

While it operates both optical communication and defense businesses, considering its subsidiary relationships, it is reasonable to classify it as a defense company.

RFHIC is a company that produces gallium nitride (GaN)-based power amplifiers, manufacturing radar equipment for drone detection, which has become crucial in modern warfare.

A key feature of this company is its ability to implement high-performance radars using GaN material, which offers higher output and frequency characteristics than traditional silicon materials.

As real-time data communication for robots and autonomous vehicles becomes more important, there is a possibility of it connecting with the physical AI theme in the future.

Consequently, RFHIC is a company that can be linked to various themes, including defense, optical communication, and physical AI.

While semiconductor SoBujang stocks are showing strong performance, some may experience short-term fatigue due to the sharp rise in the latter half of yesterday's trading session.

There is no need to overreact to the phenomenon where only a few specific stocks are concentrated, rather than the entire semiconductor SoBujang sector moving.

Through a rotational rally of secondary battery and pharmaceutical/bio stocks, the KOSDAQ index has the potential to rise to 900 points, and even if a correction occurs, additional upside remains if trading volume recovers.

Large-cap semiconductor stocks like Samsung Electronics and SK Hynix may rise together due to passive liquidity if the NASDAQ index breaks its new high, and until then, short-term focus on SoBujang and optical communication-related stocks with strong upward momentum is effective.

HD Hyundai Electric, LS Electric, and Hyosung Heavy Industries are among them, but recently, Iljin Electric and Sanil Electric are gaining attention as they build order backlogs in the European and US markets.

The valuation trends of leading US power equipment companies like Eaton Corporation influence domestic companies, and Iljin Electric recently announced a positive trend with a 187.1 billion won order from the UK.

It is advisable for holders to maintain their positions as there is believed to be additional upside potential until the second half of the year.

If Jusung Engineering's upside room opens up, other semiconductor SoBujang stocks are also likely to gain momentum.

Growth across Doosan affiliates is expected, linked to the forecast of a 42% reduction in Samsung Electronics' foundry division deficit.

The merits of post-processing OSAT packaging are being highlighted over front-end processes, drawing attention to companies like Doosan Tesna, Techwing, YC, and DI, which have strong performance.

As the industry shifts to a multi-product, small-batch production system, the importance of post-processing OSAT packaging, which can flexibly respond to customer demands, is increasing.

Currently, the market sees KOSPI cautiously hovering at par, while KOSDAQ has weakened compared to early trading.

It is an effective strategy to buy semiconductor SoBujang stocks by targeting adjustments, as some profit-taking is expected in this sector.

Institutions and foreigners are not leaving the market but are looking for the next sector, so rather than fluctuating with index movements, one should seize buying opportunities in semiconductor SoBujang during corrections.

If market momentum is utilized, communication component stocks and secondary batteries can be used, and KOSDAQ-centric plays are expected to be smoother than KOSPI.

While KOSPI rose about 60% in the first half of this year, KOSDAQ rose significantly less, which seems to have been chosen as an alternative.

Institutions, judging that foreign selling would not easily end, are conducting basket trading mainly in KOSDAQ semiconductor SoBujang stocks.

This trend has continued since September, and experts believe that the KOSDAQ-led uptrend may continue until October.

Given the time required for thermal power plants or nuclear power plant construction, and the urgent need for electricity supply, the role of renewable energy is emphasized.

Even if the Trump administration emphasizes fossil fuel development, the necessity of renewable energy persists.

The emphasis on renewable energy's ability to supply electricity quickly, unlike thermal or nuclear power, has driven the rebound in solar power stocks.

Korea Circuit, Daeduck Electronics, and Isu Petasys are KOSPI stocks, and their upward momentum may differ due to market supply and demand differences.

KOSDAQ stocks have high return elasticity, and with continued packaging demand, Korea Circuit's trend reversal and further upside are expected.

Robot stocks are an area expected to quickly monetize with the expansion of the AI industry and the popularization of humanoid robots.

Robotis is playing a leading role based on its actuator technology, and its recent rise is interpreted as a concomitant increase due to KOSDAQ liquidity inflow.

Robotis rebounded below 300,000 won, attracting buying at low points, and possesses long-term upward momentum regardless of short-term volatility.

Hana Securities raised Naver's target price from the previous 350,000 won to 400,000 won.

The newly highlighted 'Neo Cloud' refers to a GPU-centric cloud infrastructure specialized in artificial intelligence, rather than a general-purpose cloud like Amazon AWS, and is based on a partnership with Nvidia.

Despite concerns about slowing memory market growth, Micron is showing a strong commitment to CAPEX investment, pre-investing in cleanrooms and construction.

Micron's proactive cleanroom and construction investments are becoming visible, and domestic related SoBujang companies are expected to benefit.

Experts diagnosed that market liquidity is shifting towards KOSDAQ, and ETF-related liquidity is also on an upward trend.

Regarding the geopolitical risk of the Iran issue, there is an opinion that negotiations may be entering the final phase, and the market believes that liquidity may concentrate on the KOSDAQ SoBujang sector with strong growth momentum.

In Q4, there are many factors that hint at liquidity, such as clinical data announcements and conference schedules, so expectations for big pharma M&A and technology contracts are valid.

Pre-discussions may take place ahead of the J.P. Morgan Healthcare Conference in January next year, and rumors spreading in the market could be reflected in stock prices in advance.

Conference schedules and clinical data announcements are also analyzed to be important hints for the Q4 bio sector's liquidity.

Experts cite the slow pace of AI market response and delays in China factory expansion as reasons why the stock price of semiconductor equipment company Nextin remains at a low level.

Nextin's equipment has comparable functionality to US KLA equipment but is half the price, giving it a competitive edge.

Experts expect that once 3D NAND equipment setup is completed in March next year, shipments to SK Hynix and Chinese customers will be possible, which will be positive for the stock price.

Nextin is supplying HBM-related Crocus equipment and 3D NAND equipment to SK Hynix, so if the delay issue is resolved, growth is expected.

Rising international oil prices, military tensions in the Middle East, and news of China suspending petroleum product exports are converging, leading to increased global fuel supply instability and an inflow of buying interest into domestic refinery stocks. Related stocks such as S-OIL, SK Innovation, GS, and Heung-A Shipping are showing strong trends.

Brent crude surpassed $102 per barrel, and WTI exceeded $92. Currently, S-OIL is trading at 161,500 won, up 8.6%, while SK Innovation is up 6.3%, and GS and Heung-A Shipping are showing strong gains in the 3% range.

Securities market consensus estimates Q3 revenue at 198.8328 trillion won and operating profit at 105.4998 trillion won, with memory operating profit margins expected to reach 70-80%.

However, the strong Korean won and increased cost burden in mobile and home appliance set businesses are cited as downside factors, leading some securities firms to lower their operating profit estimates. The expansion of HBM4 is expected to constrain general-purpose DRAM supply, and improvements in base die and foundry profitability will be key factors for future earnings.

The market cannot rise every day, so accepting temporary corrections of previously strong stocks is necessary to secure additional upside potential.

He advised that it is time to consider a long-term strategy of selling a portion of holdings when prices surge and maintaining the core position for continued growth.

Kim Tae-sung, Department Head, judged that when SKC and Chemtronics showed similar chart patterns, it was advantageous to look at the market leader first.

SKC, with its glass substrate manufacturer Absolix, secured market leadership, which could drive a cascade of rises for peer companies like Chemtronics.

As the only company with a mass production system for glass substrates, SKC is expected to show differentiated stock performance due to the absence of competitors.

Samsung SDI is performing well in the energy storage system (ESS) sector in the European market, suggesting a positive trend could continue not only in Q4 this year but also into Q1 next year.

He predicted that if Samsung SDI recovers to 530,000 won, the upward pace of secondary battery material stocks within KOSDAQ could accelerate further.

Compared to LG Energy Solution, despite its technical chart superiority in the past month, Samsung SDI was deemed more favorable with a 7 to 3 ratio, considering its stable order announcements and core business performance in the first half of the year.

It was noted that within the semiconductor sector, CXL showed the strongest performance recently.

Leading CXL stock Exicon's price rose fivefold in three months, from a low of 1,110 won on July 29 to 50,000 won, and since Neosem also started moving following Exicon, it is highly likely to gain upward momentum.

Neosem is on the verge of commercializing SSD card testers and CXL mass production equipment, so it is possible to expect similar trends to Exicon. However, the lower trading volume compared to Exicon is a key factor, and it is advisable to consider buying during corrections rather than chasing the rally.

Despite PNT securing an order backlog in the trillions of won, its current stock price is stagnant, and revenue growth is slowing.

Delays in actual supply compared to orders, due to customers adjusting their facility investment pace, are reflected in its performance.

If the upward momentum of secondary battery material companies like Samsung SDI, LG Energy Solution, and EcoPro strengthens, equipment stocks will also gain attention, and re-approaching PNT is recommended when the front-end industry recovers and trading volume accompanies it.

Samsung Electronics' CAPEX consensus increased by 34%, and SK Hynix's also rose by 51%, indicating a rapid upward revision of next year's facility investment outlook.

More than half of the 37 SoBujang companies, 20 of them, achieved 'earning surprises' by exceeding their Q2 operating profit estimates, and this upward trend in performance is likely to continue until at least 2028.

When Samsung Electronics and SK Hynix's share buybacks conclude around October 10, there are concerns about the KOSPI's upside being limited due to a liquidity vacuum in large-cap stocks.

This could lead to a shift in liquidity to the relatively overlooked KOSDAQ market. Considering that October has traditionally been a period when KOSDAQ bottomed out, and the recent atmosphere, it is worth noting KOSDAQ's movement next Tuesday.

The current rise in EcoPro Group stocks is attributed to the inflow of liquidity into top-tier market capitalization stocks due to the strength of the KOSDAQ market.

For LNF, as LFP battery cathode material sales have not yet been recorded, it was advised to wait until signals of an earnings turnaround emerge.

Director Jung Tae-geun analyzed that ISC had shown an upward trend since September, using the 5-day moving average as its main trend line.

However, as of today's (the 2nd) closing price, a trend of breaking the 5-day moving average appeared, so he emphasized refraining from buying and observing for now.

He recommended that it would be a stable investment strategy to approach the stock after confirming that it recovers the 5-day moving average and its trend is restored next Tuesday or Wednesday.

He advised investors that patience is crucial in waiting for the technical support line to recover, rather than chasing impulsively.

Anchor Hong Seon-ae announced that Samsung Electronics has completed all of its planned 53 million share buybacks. The cumulative buyback amount totals approximately 14 trillion won, and the buyback rate has already exceeded 100%.

SK Hynix has also purchased 18 million out of 24 million shares, currently recording a buyback rate of over 76%, with the remaining 5 million shares expected to be purchased within 8-9 trading days.

The completion of the two companies' share buybacks, approximately 50 days earlier than expected, raises concerns that the liquidity support from other corporations, which had underpinned the index, may weaken.

Especially after Samsung Electronics' Q3 preliminary earnings announcement (October 8), the return of foreign investors is drawing attention as a key variable for the future stock performance of the top two semiconductor companies and market liquidity.

Within the optical communication sector, a rotational rally is underway, and it is crucial to select strong stocks that fall last when the market turns downwards.

RF Materials is evaluated as a company with a solid financial structure and high profitability.

Sungwoo Electronics is also moving lightly with liquidity inflow, but ultimately, RF Materials, backed by financials and performance, is likely to show a better trend.

The solid-state technology market, which is much larger, is considered a superior alternative to glass substrates for solving the key challenge of electric vehicle charging time reduction.

Solid-state batteries are considered important technology given the market growth potential, including the need for EV charging.

As recent market customer deposits are not as large as before, secondary or small/mid-cap stocks tend to show greater elasticity and lead the market rather than large-cap stocks.

Cosmo Advanced Materials has diversified its business with 80% in secondary battery cathode material and 20% in MLCC-related businesses.

Cosmo Advanced Materials is classified as a strong secondary stock in terms of elasticity and is evaluated as a stock that can move lightly with market trends.

In the current unstable market sentiment, it is advantageous to build a portfolio centered on stocks with strong upward trends.

Simtek and SFA Semiconductor are mentioned as SoBujang stocks that have broken through their highs and are likely to enter a new trend phase with rapid price action.

The improvement in Samsung Electronics' foundry business is expected from the second half of this year to early next year, and related news is projected to be significantly highlighted during this period.

For foundry-related stocks like Doosan Tesna, a mid-to-long-term approach of accumulating shares through phased buying during corrections is effective, aligning with a Buy & Hold strategy.

The critical catalyst for Samsung Electronics to break 400,000 won is the improvement in foundry and system semiconductors, which is also expected to positively impact Doosan Tesna's stock performance.

When constructing a semiconductor sector portfolio, a strategy of investing 30% in Samsung Electronics and SK Hynix, and 10% each in two other SoBujang stocks, can be considered. The stock prices of the semiconductor top two are analyzed to accelerate from the second half of this year and potentially surpass previous highs by the first half of next year.