Supply and Demand Spreads Beyond Semiconductors to Power, Secondary Batteries, and Construction

The stock trend immediately preceding a major event in the stock market provides a crucial clue for investors to predict future direction. If the stock price fails to rise despite extremely good news being announced, it could signal a short-term peak. Conversely, if the stock price does not fall despite bad news, that range is likely to be the bottom.

Especially before major economic events like interest rate hikes or freezes, it is important to closely monitor the supply and demand trends of foreign and institutional investors.

Team leader Lee Jae-gyu expressed concern about the possibility of this price level still acting as resistance.

Based solely on the current supply and demand situation, there is a possibility of breaking through this resistance, but investors need to exercise caution from a technical perspective.

Nvidia's stock price is analyzed to likely face technical resistance in the $218 to $220 range.

The 'intensity' of supply and demand currently observed in the market is emerging as a key keyword. While capital was concentrated in the semiconductor sector, including Samsung Electronics and SK Hynix, in the first half of the year, a strong inflow of funds into the power equipment sector, as well as secondary batteries, has recently been detected.

This spread of supply and demand shows market vitality, but investors need to confirm the continuity of these supply and demand flows.

In investment strategy, it is necessary to adopt a flexible approach that abandons adherence to specific sectors and targets areas where market capital is actually flowing in. Team leader Lee Jae-gyu emphasized the importance of aligning with market trends, mentioning that in the past, among shipbuilding, defense, and power equipment, the PBR of the shipbuilding industry was the cheapest, but actual funds flowed into power equipment first.

Furthermore, if investment in a specific sector is excessively weighted, considering diversified investment is important for risk management.

A flexible strategy that follows market capital flows is essential for identifying investment opportunities and increasing returns. The market does not always move as predicted, so wisdom in adjusting portfolios in line with changes is required.

In other words, if a specific sector among shipbuilding, defense, power equipment, and others shows a supply and demand advantage, it is necessary to invest in that sector first to utilize market momentum.

The three major factors influencing the market, presented in February, were the AI hegemony war, Trump-Musk related risks, and domestic capital market structural improvement policies. Six months later, discussions on the third factor, the improvement of the domestic capital market structure, are actively resuming.

In particular, compared to the beginning of the year, low-PBR stock boosting measures and discussions on KOSDAQ revitalization are emerging as tangible market events, and it is expected that the macroeconomic environment is unlikely to be severely damaged before the US presidential election in November.

Nvidia continues its strong growth as a key player in the AI ecosystem. Recent quarterly revenue reached ₩133 trillion, showing an astonishing 106% growth year-over-year.

Nvidia's growth, despite some variables like TSMC's CoWoS packaging bottleneck or changes in memory prices, positively influences the overall AI-related market sentiment and has a favorable impact on the domestic memory semiconductor industry.

However, analysis suggests that not only policy benefits but also the fact that stock prices had been adjusted significantly led to a rebound in buying.

Former President Trump's strengthening regulations against China are affecting a wide range of industries, including power equipment, nuclear power, defense, and secondary batteries, further highlighting the demand for energy efficiency.

In August, the Korean stock market showed a higher rebound compared to the global average, with KOSPI rising 4.8% and KOSDAQ rising 16.8%. This largely has the character of a technical rebound from the oversold condition in July, when the Korean and Taiwanese markets, with their high proportion of tech stocks, fell sharply.

Furthermore, it is analyzed that the overall market supply and demand improved as the supply and demand distortion caused by fund liquidations and reverse trades in July was resolved.

Stablecoin issuers hold large amounts of dollars or short-term US Treasury bonds to maintain stability. Therefore, a continuous rise in US Treasury yields can act as a burden on the demand side for Treasury bonds, which in turn can affect the stability of the stablecoin market.

ESS is emerging as a critical tool that not only stores energy but also enables efficient energy use.

Rapid transition to ESS and increased utilization rates are expected to lead to increased product sales and reduced fixed costs, contributing to improved profitability for secondary battery companies. Furthermore, an ESS supply shortage is anticipated in the second half of 2027, which is expected to be a momentum for a performance turnaround in the secondary battery industry.

Since last week, the market's perception of the power equipment sector has turned positive. Intensified regulations between the US and China are accelerating energy efficiency, which is leading to increased demand for power equipment.

With the easing of previously pointed-out supply and demand issues, the possibility of a stock price rebound is growing, and in particular, the increase in power demand from US data centers is providing new momentum for the power equipment sector.

In the past, power equipment-related stocks were in an overvalued range, exceeding PER 10x, but their prices have recently declined and undergone correction.

In this situation, if the AI (Artificial Intelligence) related narrative remains valid, the power equipment sector is expected to receive another positive re-evaluation.

Construction stocks are acquiring new growth momentum, moving beyond the traditional domestic housing market logic. In particular, expectations for orders related to nuclear power and data centers are rising, warranting attention.

Major construction companies like Hyundai E&C and Samsung E&A possess ample momentum in these new markets.

For example, Hyundai E&C's forward PER is around 19x and its PBR is 1.2x, indicating undervaluation compared to other sectors.

Coupled with this valuation attractiveness, operating profit and net profit improvements are expected from 2025 to 2026, leading to a positive outlook for construction stocks.

In particular, small-cap stocks like TLB may show high volatility, so caution should be exercised during investment.

The company's technical expertise in various reactor designs, coupled with its actual experience in building them in Korea, is a significant advantage.

Notably, with nuclear power construction experience in numerous countries excluding China and Russia, the company is highly recognized for its competitiveness in the global market.

The current market is likely to transition into a stock-specific market characterized by rapid sector rotation. In this environment, it is important to avoid overly frequent stock movements and focus on selecting individual stocks.

If you feel burdened by individual stock selection, combining an ETF strategy can be an option. Team leader Lee Jae-gyu predicted that from now until 2026 will be the real battle of individual stocks.