(TrendHub KR – Posts by ICARUS Journalist) On February 5, 2024, amidst heightened uncertainties in the financial market, the Korean stock market saw a decline in both the KOSPI and KOSDAQ indices due to institutional selling pressure. The KOSPI index fell by 0.92% to close at 2,591.31, and the KOSDAQ index also dropped by 0.83% to end at 807.99. This market movement is interpreted as a result of a combination of global economic instability, diminished expectations for a U.S. interest rate cut, and investors’ cautious stance ahead of the Lunar New Year holiday.
Market Situation Analysis
While the New York stock market showed an upward trend, buoyed by strong employment indicators and favorable earnings from major tech companies, Asian markets, including Korea’s, faced downward pressure despite these positive external factors. Specifically, the Korean market’s decline was attributed to short-term overheating of low PBR stocks, profit-taking, and a shift in institutional investors to selling.
Institutional investors led the downturn with a net sell of 724.2 billion won, and despite foreign investors recording four consecutive days of net buying in the spot market, they net sold 8,474 contracts in the futures market, dampening investment sentiment. This trend in supply and demand increased market volatility and investor anxiety.
Dual Insight Analysis
Positive Investment Perspective:
Volatility provides opportunities even amidst uncertainty. The current market downturn could offer a chance to purchase oversold stocks at lower prices, particularly weak tech and growth stocks that present attractive entry points considering their long-term growth potential. Furthermore, the net buying by foreign investors in the spot market could be interpreted as a long-term positive signal for the Korean stock market, potentially laying the groundwork for market recovery.
Negative Investment Perspective:
Short-term market volatility and global economic uncertainties signal caution to investors. The retreat in expectations for a U.S. interest rate cut exacerbates market instability, suggesting the possibility of further declines. In such an environment, risk management becomes even more crucial, with strategies to minimize exposure to high-risk assets and increase cash holdings to maintain flexibility being advisable.
Today’s Highlighted Stocks and Theme Analysis
Artificial Knee Joint and Surgical Robot Collaboration Theme:
- SolgoBio (+29.92%): SolgoBiomedical’s collaboration with Curexo to combine the artificial knee joint ‘Freedom Knee’ and the surgical robot ‘Cuvix-Joint,’ delivering the first supply to Daejeon The Zen Hospital. The entry into the market with high-quality medical devices approved by the FDA and domestic MFDS garnered investor interest.
Global Expansion Theme for Lung Cancer Diagnosis Kits:
- AptamerScience (+30.00%): AptamerScience aims to secure export product approval from the MFDS for the PCR version of its lung cancer in vitro diagnostic product ‘AptDetect Lung.’ The new product, analyzable with PCR diagnostic equipment, is expected to reach the price ceiling due to shorter test result times and easier market entry abroad.
Gene Therapy Development Success Theme:
- Helixmith (+29.93%): In collaboration with Chinese partner Northland Biotech, achieved primary endpoints in Phase 3 clinical trials of the gene therapy ‘Engensis’ for patients with severe peripheral arterial disease. Investor expectations were reflected due to plans for commercialization in China and an annual sales forecast of 1.2 trillion won.
Superconductor Development and Business Entry Theme:
- CCS (+30.00%): Despite being deemed ‘unqualified’ in the Ministry of Science and ICT’s review of the major shareholder change, continued volatility as a superconductor theme stock. Investor interest remains despite challenges in government approval and issues with losing major shareholder status.
- Shinseong EST (+29.88%), Shinseong DeltaTech (+18.54%): Announcement of verification for the superconductor LK-99 pending. A presentation led by Professor Kim Hyun-tak at the American Physical Society is expected, with investor anticipation for the verification of the superconductor technology’s reliability and applicability.
Renewable Energy and Eco-friendly Technology Theme:
- Hyundai Hims (+29.92%): As a specialist in ship block manufacturing, the company attracted investor interest due to the potential for developing and applying eco-friendly and high-efficiency technologies in shipbuilding.
- KIB PlugEnergy (+29.74%): Post-acquisition stock price recovery of solid-state battery technology holder BK Dongyoung Tech, reflecting the growing recognition of the importance of renewable energy and electric vehicle-related technologies.
Advanced Materials and High-performance Materials Development Theme:
- Chemtros (+13.43%): Focused buying by investors due to the development of metamaterials capable of changing shape and properties in real-time and the successful mass production process for organic ligands.
Low PBR Stocks and Rebound Theme:
- Blue Savings Bank (+11.59%), Sajo Daerim (+7.66%), Young Poong Precision (+7.59%), Youngone Holdings (+6.77%), Ilsung Pharmaceuticals (+6.26%), KG Mobilians (+5.65%), Leadcorp (+5.21%), Binggrae (+5.03%), HD Hyundai (+4.55%), Hyundai Motor (+4.85%), Seoyon E-Hwa (+2.90%), Deokyang Industry (+3.24%) Feature Analysis: The trend of foreign investors’ net buying in low PBR stocks and ongoing valuation normalization is noted. Particularly, the revaluation potential of sectors such as automotive, securities, transportation, and energy was highlighted.
- Mobase (+17.42%), Mobase Electronics (+2.69%) Feature Analysis: Highlighted as low PBR stocks following Hyundai Motor’s rebound. Known as a manufacturer of electronic components and electrical parts for automobiles, being a major supplier to Hyundai and Kia led to an influx of investor buying.
Bio and Medical Device Theme:
- CanariaBio (+14.83%), Sejong Medical (+12.67%) Feature Analysis: Despite the recommendation to halt Phase 3 clinical trials of CanariaBio’s ovarian cancer treatment, the DSMB’s recommendation based on the potential for significant efficacy in terms of overall survival due to the nature of immunotherapy drew attention.
Construction and Infrastructure Investment Theme:
- Ssangyong C&E (+8.27%) Feature Analysis: The announcement of a takeover bid and delisting initiative by Han & Co. for 700 billion won. The announcement of the public purchase plan for Ssangyong C&E shares increased investor interest.
Automotive and Supplier Theme:
- Hwashin R&A (+24.12%) Feature Analysis: Strong performance due to Hyundai·Kia’s sharp rise and Hyundai Mobis’ investment, highlighting low PBR. Participation in shares for strategic cooperation with the Hyundai Motor Group attracted investor attention.
High Proportion of Treasury Shares Theme:
- Jo Kwang Leather (+18.33%) Feature Analysis: As a listed company with a high proportion of treasury shares, it received attention from investors due to the government’s treasury share policy and being mentioned as an undervalued stock in the low PBR segment.
K-Construction Machinery Theme:
- HD Hyundai Construction Machinery (+7.59%) Feature Analysis: The interest of investors rose with the news of market exploration and an IR presentation by the K-construction machinery company, which earned 2 trillion won last year.
Samsung Group Related Theme:
- Samsung C&T (+0.47%), Samsung Life Insurance (-1.53%), Samsung Electronics (-1.20%) Feature Analysis: The stock trend of major Samsung Group affiliates following the ‘unfair merger’ verdict of not guilty for Lee Jae-yong. Investor reactions varied with the business justification of the Samsung C&T merger and the acquittal of Chairman Lee.
AI and Technological Innovation Theme:
- eLANCYS (+9.38%) Feature Analysis: The stock price rose due to expectations of accelerated large-scale investments and M&A following the removal of management restraints on Samsung Electronics Chairman Lee Jae-yong.
Semiconductor and Technology Development Theme:
- Jararam Technology (+7.54%) Feature Analysis: Continued benefits expected from the expansion of the RISC-V ecosystem. Anticipation built on Samsung Electronics and LG Electronics’ plans to apply RISC-V based technology.
Advanced Process and Technology Localization Theme:
- Hansung Cleantech (+7.45%) Feature Analysis: Increased expectations with the first successful domestic production of ultra-pure water and supply to SK Siltron. The localization of ultra-pure water, essential for advanced semiconductor manufacturing processes, raised expectations.
Robotics and High Precision Machinery Manufacturing Theme:
- Haesung TPC (+8.33%) Feature Analysis: As the only manufacturer of reducers for robots in Korea, the stock rose due to strengthened technological capabilities linked to Hyundai Motor’s AI research institute establishment.
AI Technology and Content Development Theme:
- Sandoll (+13.47%) Feature Analysis: Sandoll’s development and transfer of AI visual technology faster than OpenAI and its machine learning-based font search technology services were highlighted.
Global Machine Vision Collaboration Theme:
- Deepnoid (+2.88%) Feature Analysis: The stock rose with the announcement of a business agreement (MOU) with Cognex, a top global industrial machine vision company, for joint development of an AI-based image analysis system.
Gyeonggi Province Division and Policy-Related Theme:
- XPERIENCE (+14.89%), OpenKnowl (+8.62%), Jinyoung (+6.26%) Feature Analysis: Related company stocks rose due to statements by Minister of Justice Han Dong-hoon regarding the division of Gyeonggi Province and expectations for policy resolutions.
Education and Social Care Policy Theme:
- MegaMD (+7.18%), NE Neungyule (+5.89%) Feature Analysis: The stock prices of education-related companies rose following President Yoon Suk-yeol’s statement on transitioning from ‘parental care to national care’ and the announcement of a nationwide expansion plan for the Neungyule school.
Airline Industry Restructuring and Merger Theme:
- AsianaIDT (+14.25%) Feature Analysis: News of the imminent merger between Korean Air and Asiana Airlines. Expectations reflected in the stock price due to progress in merger approval and the creation of a mega carrier.
Content Production and IP Utilization Theme:
- Samsung Publishing (+16.94%) Feature Analysis: The stock rose with the theatrical release of ‘Baby Shark’ and participation in the OST by K-pop idol group ENHYPEN. Samsung Publishing’s investment and IP utilization strategy led to a stock price increase.
Electric Vehicle and Energy Storage Technology Theme:
- ENChem (+5.80%) Feature Analysis: Positive market reaction due to electrolyte supply in the North American market and expansion plans for an electrolyte production plant in Georgia. Strengthened cooperation with electric vehicle battery manufacturers and market expansion.
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Disclaimer
This article is provided solely for informational purposes and should not be interpreted as any form of investment advice or financial consultation. Trend Hub News does not bear legal responsibility for the contents of this article. While the information is based on accurate and reliable sources, it is understood that market trends may change. All investment decisions should be made under personal responsibility, and this article should not be used as the sole basis for any investment decisions. It is recommended to consult with a professional before making any significant investment decisions.