Samsung Electronics Special Dividend D-5, Stock Price Strong

The index recently recovered to around 7,000 points. The KOSPI, which had fallen to around 6,500 points in early September due to a combination of AI slowdown concerns and high interest rate burdens, has now regained its previous position.

It has recently recovered to its original position and is maintaining around 7,000 points. Foreign investors showed buying activity last Friday, continued buying this morning, but then saw buying momentum slow down in the afternoon.

Over the weekend, Goldman Sachs released a positive report on Samsung Electronics. It suggested an 'overweight' opinion and a target price of 490,000 won.

Also, as the end of the September quarter approaches, market expectations for Samsung Electronics' special dividend have grown. With the perception that one must hold Samsung Electronics before September 28 to receive the special dividend, the strong momentum for Samsung Electronics and Samsung Electronics preferred shares became prominent. Preferred shares, in particular, recorded a higher rate of increase than common shares.

The size of Samsung Electronics' shareholder return, including share buybacks and cancellations, is still undecided. There is a possibility that a comprehensive shareholder return plan will be announced around the third-quarter earnings release or in the first quarter of next year.

Foreign investors have shown unusual movements, repeatedly selling at the end of each quarter since last year, deviating from typical patterns. The passive buying on the trading day before the Chuseok holiday is interpreted as part of a reduction in stock holdings amidst a high-interest rate environment in the US, awaiting a strong momentum in October. Uncertainty is high, as buying briefly appeared in early September only to turn into significant selling again.

The phenomenon of reducing stock holdings in portfolios due to the high-interest rate environment in the US continues. On the trading day before the Chuseok holiday, an atmosphere anticipating strong momentum in October was formed, rather than aggressive buying.

This acts as a major factor suppressing stock prices.

To resolve high oil prices, geopolitical risks such as an end to the conflict with Iran must first be alleviated, leading to a vicious cycle where rising energy prices translate into producer and consumer prices.

Due to global countries selling US Treasuries and inflationary pressures, the US 10-year Treasury yield is approaching 5%.

Samsung Electronics' buyback is also expected to conclude early next month, raising concerns about increased volatility due to a supply gap. In the case of SK Hynix, an average of 1 trillion won was purchased daily, exceeding the estimated 650 billion won, and the buyback is expected to be completed by mid-October along with Samsung Electronics.

At the current pace, Samsung Electronics' share buyback is expected to conclude in early next month, and SK Hynix's by mid-October. SK Hynix actually purchased approximately 1 trillion won daily, compared to an average estimate of 650 billion won.

Concerns are being raised about increased stock market volatility due to the absence of a supply and demand driver after the share buyback hiatus.

Amid continued outflow of individual investors and uncertainty in foreign investor supply and demand, expectations for Samsung Electronics' preferred share cancellation and SK Hynix's utilization of treasury shares are key variables.

While additional buybacks by Samsung Electronics may be difficult, there is some expectation for the cancellation of Samsung Electronics preferred shares. SK Hynix may utilize treasury shares as per an agreement with its labor union.

There is also a possibility of the reappearance of 'sidecar' phenomena that disappeared during the share buyback period, and the outflow of individual investors and uncertainty in foreign investor supply and demand may persist.

The bottleneck of AI accelerators (GPUs) is shifting from computational power to the memory segment that supports GPUs.

As the function of data centers expands from computation-centric to inference, the demand and importance of memory semiconductors increase. As a result, domestic memory semiconductor companies such as Samsung Electronics and SK Hynix are expected to benefit.

The visibility of HBM4-related sales will be the key observation point determining the success of Samsung Electronics' Q3 performance. While rising DRAM prices drove growth in the past, HBM is now entering a valuation period that will dictate performance.

As HBM4-related sales become visible, the proportion of HBM will become crucial in Samsung Electronics' Q3 earnings announcement. SK Hynix's high HBM proportion is already reflected in its stock price, but Samsung Electronics' HBM operating profit contribution is emerging as a key observation point for the future.

"Previously, in the case of HBM, the stock price was significantly raised due to expectations, but I think HBM will be the main character of this third-quarter earnings announcement for Samsung Electronics."

The next-generation 'Rubin Ultra' model plans to double the number of HBM4 units to 16, compared to the existing 'Vera Rubin'. Nvidia CEO Jensen Huang predicted that AI semiconductor sales would double next year, while memory supply fails to meet demand.

Nvidia's next-generation 'Rubin Ultra' model is expected to double its HBM4 capacity (from 8 to 16 units) compared to the existing 'Vera Rubin'. This is a technological change supporting the increasing demand for AI semiconductors.

Despite this increase in demand, it is analyzed that the phase where memory supply cannot keep up with demand will continue for some time.

The US-China summit will be held on September 24th, US local time. The impact of discussions on Iran and Taiwan issues on oil price stability is drawing attention.

With the US-China high tariff moratorium set to expire in November, the possibility of a renewed tariff war is also a major market variable. The US may weaponize AI semiconductors, and China may weaponize rare earths for negotiations.

At the US-China summit, issues concerning Iran, Taiwan, and cooperation with China will be discussed as key agenda items for oil price stability. The extension of the high tariff moratorium, set to expire in November, is also an important matter.

If the tariff extension fails, there is a concern that the US-China trade war could reignite. Furthermore, the outcome of negotiations surrounding US regulations on AI semiconductors and China's control over rare earths is expected to have a significant impact on the market.

The possibility of the US lowering AI semiconductor regulation barriers in exchange for rare earths is being suggested. This would be a significant variable for South Korean semiconductor companies.

If US regulations are eased, there is a concern that China's Changxin Memory (CXMT) could accelerate its expansion in DRAM sales. While CXMT does not yet have HBM manufacturing capabilities, a shift in the DRAM market's competitive landscape, considering the technological gap and market conditions, could pose a potential burden for Samsung Electronics.