[R&E] DRAM Surges 72%, Signaling a 'Memory Super Cycle'... K-Manufacturing Breaks Through Geopolitical Headwinds

[R&E: Research & Epoch]
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Market Overview: Key Indicators and Trends

The U.S. stock market plunged the previous day, dragged down by geopolitical risks triggered by former President Trump's Greenland tariff threat (a 10% tariff announced for February 1). A 'Sell America' fear spread across the broader market as both the S&P 500 (-2.06%) and NASDAQ (-2.39%) fell simultaneously. This deepening external uncertainty stimulated preference for safe assets, pushing international gold prices to an all-time high. Coupled with concerns over European pension funds selling U.S. Treasuries, this caused a bear steepening phenomenon where the 10-year yield surged by +7.0bp.

On the previous trading day, the domestic stock market closed slightly lower as the KOSPI underwent a minor correction (-0.39%) due to external headwinds and fatigue from 12 consecutive days of gains. In contrast, the KOSDAQ secured downward rigidity, rising +0.83% from the previous day. Notably, the utility sector surged +14.43% on expectations of nuclear power policies, and rotational buying flowed into the bio and secondary battery sectors, preserving the market's warmth. Foreign investors also maintained their 'Buy Korea' stance by net purchasing KRW 122.9 billion in the KOSPI. Today's domestic market is expected to see a differentiated trend centered on leading stocks with solid earnings momentum, amid a tug-of-war between the stabilization of tariff-driven noise and solid memory fundamentals.

Sector-Specific Key Issues and Insights

The structural strength of the memory semiconductor market is becoming evident, reaffirming the IT sector's leadership. The DDR4 8Gb spot price has surged a staggering +72.41% over the past month, and with a maximum price increase of 50% expected in the first quarter, the legacy memory price upcycle is judged to be in full swing. This serves as a key rationale for upwardly revising the earnings forecasts of domestic materials and equipment companies. Soulbrain is anticipated to see its operating profit increase by +62% year-on-year in 2026 based on the prospect of mutual benefits in both memory and foundry, making it the most anticipated stock in the sector. In addition, SEMCNS has seen its 2026 operating profit forecast revised upwards by +70.0% year-on-year, buoyed by expectations of structural growth in NAND-related demand due to the introduction of AI server memory structures (ICMS) and increased adoption of high-capacity SSDs.

In the pharmaceutical and bio sectors, notable achievements in high-value-added technology exports are improving investor sentiment. Alteogen has signed an exclusive contract with GSK subsidiary Tesaro for the development and commercialization of the SC formulation of the anticancer drug 'dostarlimab'. The total size of this contract amounts to $285mn, which proves that the ALT-B4 platform technology has firmly established itself as an essential strategy for securing marketability.
Meanwhile, in the industrials and infrastructure sectors, policy momentum and structural turnarounds are progressing in tandem. KEPCO reached its highest price since its listing in 1989, driven by expectations for domestic and international nuclear power projects and the PBR enhancement policy, with its PBR exceeding 0.71x. In the shipbuilding equipment sector, Hanwha Engine is also undergoing a valuation re-rating, as its fourth-quarter operating profit is expected to increase by +92.7% year-on-year, supported by an increase in medium-speed engine volumes in 2026 and top-line growth in the AM (aftermarket) sector. Conversely, due to the aftermath of a 3 million-ton plunge in steel demand over three years caused by the slowdown in the construction industry, Hyundai Steel is continuing industry restructuring efforts, such as closing half of the facilities at its Incheon rebar plant.

Market Signals

• Accelerated Recovery in Memory Industry: The DDR4 8Gb spot price has surged 72.41% in one month, indicating a structural increase in legacy memory prices.
  Value-Up Policy Effects Materializing: KEPCO's PBR has exceeded its all-time high level at 0.71x, with its stock price hitting the highest mark since its listing in 1989.
  Reaffirmation of Bio Platform Technology Value: Alteogen signed an exclusive contract for an SC formulation anticancer drug with GSK subsidiary Tesaro, being recognized for its technology transfer value totaling $285mn.

Epoch View: Investment Implications

In a phase where global geopolitical risks increase stock market volatility, a selective strategy focusing on sectors with self-sustaining growth engines that are not sensitive to external shocks is required. The domestic stock market possesses clear sector-specific growth cycles, such as the turnaround in the memory semiconductor industry, the expansion of K-defense exports, and the expansion of energy infrastructure. In particular, the surging trend in DRAM spot prices serves as a key momentum that heightens the visibility of 2026 earnings improvements for materials and equipment companies within the semiconductor sector (Soulbrain, TES, etc.).

Additionally, driven by the government's shareholder return policy (Value-Up), a trend of accelerated re-evaluation of undervalued large-cap stocks like KEPCO is being captured. Financial stocks face short-term uncertainties, such as provisioning for Hong Kong ELS in the fourth quarter, but in the mid-to-long term, a strategy of selectively accumulating holding companies with high possibilities of dividend expansion is valid, reflecting expectations of a convergence toward a 50% shareholder return rate and the implementation of Value-Up disclosures in April. In the industrials sector, attention is needed on companies riding the structural growth of downstream industries, such as Hyundai Rotem, which possesses large-scale order momentum, and Sanil Electric and Seojin System, which can expect top-line expansion in the ESS and renewable energy sectors.

This content was generated by News Epoch's proprietary AI algorithm, which tracks and analyzes public data from major domestic securities research centers in real-time.
It is an objective summary based on collected data, and it is clarified that it is not an investment solicitation or recommendation for specific stocks.