[R&E] KOSDAQ Breaks Through 1,064.41p for the First Time in 4 Years, Opening the 'Cheon-sdaq' Era... HBM/Substrate Materials Show Explosive Growth of Over 200% in Earnings

[R&E: Research & Epoch]

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Market Summary: Key Indicators and Trends

The New York stock market closed higher the previous day, with the DOW index rising +0.64%, driven by expectations for Big Tech earnings and an influx of dip-buying. Amidst prevailing expectations that the U.S. FOMC will freeze the benchmark interest rate in January, the market is focusing on monitoring the timing of future rate cuts. On the previous trading day, the domestic stock market exhibited extreme divergence. The KOSPI fell by -0.81% due to a sell-off in large-cap semiconductor and automobile stocks, continuing a wait-and-see approach just ahead of the 5,000pt mark.

On the other hand, the KOSDAQ closed at 1,064.41p, soaring +7.09% from the previous day, as growth stock sectors such as biotech, robotics, and secondary batteries showed strength. This is recorded as breaking the highest level since the dot-com bubble and the resumption of the 'Cheon-sdaq' after 4 years. It is judged to be the result of the concentration of foreign and financial investment supply and demand on top KOSDAQ market cap themes, along with the expression of the government's policy will for a 3,000pt KOSDAQ. In the foreign exchange market, linked to the plunge in the Yen/Dollar exchange rate, the USD/KRW dropped significantly to 1,441.6 won, entering a phase of expanded short-term exchange rate volatility. In today's market, as the previous day's pre-market volatility rose slightly, a selective stock approach keeping in mind the possibility of profit-taking is required.

Key Industry Issues and Insights

In the semiconductor sector, DRAM spot prices have surged +47.52% over the past month, solidifying the entry into an upcycle. In particular, as demand for artificial intelligence (AI) inference increases, the 3D NAND (phosphoric acid etchant) related materials market is expected to benefit, and the 2026 operating profit forecast for semiconductor materials company Soulbrain is expected to grow by +52% compared to the previous year. In addition, profitability improvements in the high-performance packaging and substrate segments are notable. Haesung DS, a semiconductor packaging specialist, demonstrated solid earnings visibility as its Q4 operating profit exceeded the consensus by 13.2% and surged +248% year-on-year due to the expansion of price indexation for automotive lead frames. Following the expansion of investments in AI data centers, the transition to the 800VDC architecture to respond to the increase in server rack power density will be introduced in earnest after 2027, and in this process, orders for domestic companies related to power semiconductors and fuel cells are expected to materialize starting in the second half of 2026.

The energy and oil refining sectors are increasing their profit generating capacity based on solid business conditions. S-Oil's Q4 operating profit grew +85% quarter-on-quarter, exceeding the consensus by 11%, and its fair value was revised upward to 130,000 won in line with the forecast for a prolonged boom in the oil refining industry in 2026. In the chemical materials sector, UNID's Q1 operating profit is expected to increase by +164% quarter-on-quarter due to the improvement effect of its Chinese subsidiary following the surge in chlorine prices. Meanwhile, in the power infrastructure sector, driven by an explosion in global demand for power equipment, HD Hyundai Electric achieved its highest-ever quarterly performance with a Q4 operating profit of 320.9 billion won, and is demonstrating overwhelming growth, with its operating profit margin improving by +7.2%p compared to the same period last year. In the shipbuilding industry, while the Newbuilding Price Index is forecast to rise by +13.6% until 2027, HD Korea Shipbuilding & Offshore Engineering's 2025 operating profit is projected to increase by +172% year-on-year. The cosmetics sector shows a trend of increasing fundamental reliability with a meaningful increase in the proportion of foreign ownership. However, on an individual company basis, Aekyung Industrial, which is undergoing continued restructuring of its Chinese business partners, confirmed sluggish performance with a -30% decrease in its Q4 overseas cosmetics sales. In the bio sector, fueled by the high growth of ALYGLO, a high-margin product, GC Biopharma succeeded in turning to an operating profit surplus in Q4 for the first time in 8 years, and Yuhan Corporation is also experiencing continued growth in lazertinib royalties, showing a clear trend of profit improvement in the healthcare segment.

Market Signals

• KOSDAQ Surge: On the previous trading day, the KOSDAQ index skyrocketed by +7.09% from the previous day to record 1,064.41p, resulting in extreme decoupling with the KOSPI.

• High Growth in Semiconductor Materials/Substrates: Driven by the increase in AI inference demand and the effect of price indexation for automotive lead frames, Soulbrain's 2026 operating profit growth rate reached +52% year-on-year, and Haesung DS's Q4 operating profit reached +248% compared to the same period last year.

• Proof of Infrastructure Profit Capacity: Following the boom in transformers and power equipment, HD Hyundai Electric recorded a Q4 operating profit of 320.9 billion won, achieving its highest-ever quarterly performance that exceeded the consensus by 14%.

Epoch View: Investment Implications

The current market is simultaneously showing a wait-and-see attitude centered on large-cap KOSPI stocks and an explosive concentration of supply and demand centered on KOSDAQ growth stocks, which suggests that an 'alpha strategy' where differentiation between stocks and sectors accelerates is valid in the short term. In particular, in the case of the KOSDAQ, market prices are erupting in conjunction with the government's policy will, but it is necessary to focus on the semiconductor materials, HBM-related value chain, and power equipment sectors that have secured substantial technological capabilities and earnings visibility. Companies such as Soulbrain and Haesung DS, where profit capacity growth of over 50% for 2026 is confirmed, are judged to have high defensive power even in market corrections.

On the macroeconomic front, a short-term trade risk has emerged in the automobile sector as former President Trump announced he would raise tariffs on certain imports, such as Korean-made cars, from 15% to 25%. As there is a possibility of expanded short-term volatility, a strategy to secure portfolio stability based on confirmed earnings momentum (oil refining, shipbuilding, power) is required. In the long term, attention should be paid to power semiconductors and fuel cell-related industries that are expected to benefit from the transition to the 800VDC architecture in AI data centers. In the financial sector, JB Financial Group is analyzed as having increased dividend attractiveness due to the rising possibility of raising its total shareholder return ratio to 50% in 2026.

This content was generated through News Epoch's proprietary AI algorithm, which tracks and analyzes public data from research centers of major domestic securities firms in real-time. We state that it is an objective summary based on the collected data and does not constitute a solicitation or recommendation to invest in specific stocks.