Soojang stocks rise amid large-cap sluggishness

This is analyzed as a situation where multiple complex factors collectively determine the overall direction of the market.

While the KOSPI 5-minute chart started with a long bearish candle and failed to recover, the KOSDAQ showed relative resilience, recovering its bearish candle after an initial drop.

Amidst this trend, semiconductor materials, parts, and equipment (Soojang) and some secondary battery-related stocks showed movement from their bottom, attracting market attention.

This appears to be a result of the market perceiving memory stocks as having become 'heavy-bottomed' compared to the past, meaning their stock price reaction to earnings announcements has slowed.

The domestic stock market is highly sensitive to the slowdown in Samsung Electronics' operating profit growth, making it crucial to confirm how consistently high profitability will be maintained.

To provide foreign investors with a reason to return to a buying position for Samsung Electronics, a change in the foreign ownership ratio, currently at 47%, is needed.

Some analysts have begun to raise Samsung Electronics' earnings forecast for next year from the previous 500 trillion won to around 600 trillion won. This marks a shift in consensus, which had been stagnant in the mid-500 trillion won range since June, to an upward trend.

As the earnings forecast turns upward, there is a possibility of a change in the supply and demand from foreign investors who have been in a selling trend.

It is analyzed that the market is likely to dry up without foreign investor demand until the end of the year, so attention should be paid to Soojang (materials, parts, and equipment) stocks rather than top-tier semiconductor stocks.

Institutional investors also tend not to passionately exert energy during this period from Q3 to Q4, indicating a high possibility of conservative position management.

However, there is a risk that if large-cap stocks break out of their lower bound or turn bullish again, capital flowing to Soojang stocks could shift back to large-cap stocks. Therefore, for short-term surges, it is more advantageous to utilize correction periods rather than chasing purchases.

These companies are likely to move even while large-cap stocks are stagnant. Therefore, it is advised to select companies with 확실히 expected growth for next year.

For foreign capital to return, the dollar index needs to stabilize downward from its current level of 102 to 101, which would lead to buying into emerging markets, but this could also weaken the Soojang sector.

Unlike semiconductors, the secondary battery sector is not in a good industry condition, but it is analyzed that it can be approached from a turnaround perspective.

A phenomenon was observed where some of the capital flowing to Samsung Electronics and SK Hynix moved to the secondary battery sector, which had some vacancies.

With the implementation of the European IRA expected to benefit domestic companies by curbing Chinese batteries, European automakers show a clear preference for prismatic batteries.

Samsung SDI possesses strengths in prismatic batteries, suggesting it could gain a competitive edge next year.

This technological leadership generates expectations that while LG Energy Solution might gain momentum in the second half, Samsung SDI could maintain its leading role even into next year.

ESS data center power demand, etc., are already reflected in market expectations, but electric vehicle and renewable energy policy momentum could emerge depending on the U.S. presidential election results on November 3rd.

The electric vehicle sector, which had low market expectations, has the potential to achieve better-than-expected results due to policy changes.

Secondary battery material companies are expected to take more time to process their unsold inventory, and despite weak lithium prices, the stock prices of related companies have risen, creating a discrepancy.

As the profit forecasts for material companies remain stagnant, it is suggested that if investment priorities need to be set, focusing on cell manufacturers rather than material companies would be more appropriate.

If individual company analysis is challenging, a better strategy is to invest in U.S. pharmaceutical and biotech ETFs in a basket form rather than focusing on domestic companies.

Despite the sluggishness of the biotech sector, the KOSDAQ index is showing downward rigidity and attempting to rebound. This increases the possibility of a return-driven game centered on KOSDAQ if KOSPI large-cap stocks are confined.