[R&E] KOSPI Rises 2.52% and KOSDAQ 5.47% Driven by SK hynix ADR Debut Success and Improved Semiconductor and Power Grid Exports

[R&E: Research & Epoch] This is News Epoch's signature report that provides a view into a new era of investment through an integrated analysis of global financial data and domestic securities firm research.

Global Market Brief

Last Friday, the New York stock market closed higher, driven by the strength of large-cap tech stocks and the semiconductor sector. The S&P 500 index recorded 7,575.39 points, up 0.42% from the previous day, and the tech-heavy NASDAQ index closed at 26,281.61 points, up 0.29%. The Dow Jones Industrial Average also showed a simultaneous upward trend, closing at 52,637.01 points, up 0.29%.

The driver that stimulated investor sentiment for global tech stocks was the successful settlement of Korea's leading semiconductor stock on the US stage. The US ADR of SK hynix (KOSPI: 000660) closed at $168.01, up 12.76% compared to the public offering price ($149) on its first day of listing, surpassing Micron's market capitalization on the first day. It is projected to raise a total of $24.5 billion, with the public subscription attracting 7 times the scheduled issuance volume. AI-related stocks such as NVIDIA (+4.03%) and Meta (+5.97%) also showed accompanying strength.

However, geopolitical friction in the Middle East remains a macro instability factor. Tensions over passage rights in the Strait of Hormuz have heightened as the US and Iran exchanged airstrikes over the weekend. Last Friday, the price of West Texas Intermediate (WTI) crude oil closed at $71.41 per barrel, down 0.93% from the previous day, but upward pressure appeared to strengthen again in after-hours trading before the market opened on Monday. The 10-year US Treasury yield recorded 4.5612%, up 1.0bp from the previous day.

Domestic Market Summary

Last Friday (July 10), the domestic stock market surged significantly, supported by favorable semiconductor news from the US. The KOSPI index closed at 7,475.94 points, up 2.52% from the previous day, and the KOSDAQ index closed at 837.43 points, up 5.47%, with buy sidecars activated in both markets during intraday trading. On the same day in the Seoul foreign exchange market, the USD/KRW exchange rate closed at 1,498.9 won, down 8.0 won from the previous day, falling below the 1,500 won mark.

While it is positive that domestic night futures showed an upward trend as of the pre-market opening, internal liquidity conditions are a factor restricting the upside. This is because household loans in the banking sector increased by 7.6 trillion won in June, recording the largest increase in 1 year and 10 months, and the authorities made official remarks that a base interest rate hike is necessary at an appropriate time to balance inflation and financial stability. Upward pressure on market interest rates acts as a factor increasing the valuation burden across the domestic asset market.

Accordingly, market funds appear to be concentrated into export-oriented materials, parts, and equipment (MPE) companies, power grid infrastructure, and pharmaceutical and bio sectors based on technology fee inflows, which guarantee solid earnings growth, rather than simple index betting.

Key Industry Issues and Insights

Benefiting from Global Infrastructure Expansion, Supply and Demand Improvement in Semiconductor and Substrate Value Chains

The semiconductor sector saw a steep influx of supply and demand as the tailwind of large-scale investments from the US and an export recovery trend overlapped. As of last Friday, the average daily export amount of memory semiconductors per business day was $990 million, a 200% increase compared to the same period last year. By item, DRAM exports increased by +437% and SSD exports by +178%, leading the rebound in business conditions. Semiconductor equipment suppliers also showed strength, with Wonik IPS (KOSDAQ: 240810) rising +19.2% and PSK (KOSDAQ: 319660) rising +24.4%.

The Q2 earnings forecasts for substrate manufacturers have also been revised upward. Simmtech (KOSDAQ: 222800) is analyzed to have a consolidated Q2 revenue of 456.1 billion won, up 33.8% year-on-year, and an operating profit of 50.4 billion won, surging 579.3%. This is the result of the initial shipment volume of SOCAMM, a high value-added substrate, beginning to ship. Daeduck Electronics (KOSPI: 353200) is also estimated to record a Q2 revenue of 382.5 billion won (+55.6% YoY) and an operating profit of 68 billion won (+2,241.8% YoY). This suggests that the improvement in demand for miniaturized substrates driven by the expansion of global AI data centers is translating into tangible earnings for MPE companies.

Benefiting from Global Power Grid Expansion and the High Growth of Nuclear Power Plant Equipment

The acceleration of AI infrastructure investments by Big Tech is directly translating into a long-term order rally for the power cable and equipment sectors. Iljin Electric (KOSPI: 103590) rose +6.3% on the news of securing a contract for extra-high voltage cables worth 85 billion won in the UK, and Daewon Cable (KOSPI: 006340) climbed +17.3%. Taewoong (KOSDAQ: 044490), a manufacturer of nuclear power plant equipment, also rose +12.4% as it secured a contract for components of a 3.2GW-class large nuclear power plant in the UK.

The US government's support measures for power grid investment and the expansion of global power transmission and distribution capacity support the earnings of large-scale equipment manufacturers. Doosan Enerbility (KOSPI: 034020) is projected to see its Q2 Enerbility division operating profit increase by 53% quarter-on-quarter to 87 billion won, and its Q2 new order volume is analyzed to be approximately 2.3 trillion won. Policies expanding the share of nuclear power in major countries are judged to be a structural driver driving the long-term profitability of the domestic cable and equipment value chains.

Pharmaceutical and Bio Earnings Differentiation Driven by Large Technology Fee Inflows

The pharmaceutical and bio sector exhibited a differentiated market centered on companies that achieved tangible technology export results. Hanmi Pharmaceutical (KOSPI: 128940) is analyzed to record a consolidated revenue of 465.6 billion won (+28.9% YoY) and an operating profit of 154.1 billion won (+155.1% YoY) as a GLP-2 technology transfer down payment of $75 million (approximately 110 billion won) from Eli Lilly is temporarily reflected in its Q2 earnings. This figure significantly exceeds the market consensus of an operating profit of 86.6 billion won. Accordingly, Alteogen (KOSDAQ: 196170) rose +8.0%, and the gene-editing company ToolGen (KOSDAQ: 199800) went up +25.11%, backing the upward trend.

On the other hand, HLB (KOSDAQ: 028300) underwent a correction, falling -29.89% on the news of receiving a Complete Response Letter (CRL) from the FDA. Although it was revealed that the CRL did not include issues regarding the safety and efficacy of the product itself, this is the result of concerns over the damage to short-term earnings visibility being pre-reflected.

Individual Earnings Volatility Amidst Expanding Registration Share of Eco-Friendly Vehicles

The share of new eco-friendly vehicle registrations in Korea recorded 50.4% in the first half, surpassing half for the first time in history. Kia (KOSPI: 000270) is analyzed to fall short of the market consensus (operating profit of 2.78 trillion won) with a Q2 revenue of 31.6 trillion won (+7.8% YoY) and an operating profit of 2.53 trillion won (-8.4% YoY). This is due to cost factors such as the accumulation of provision for product warranties following a rise in the sales proportion of electric vehicles (BEVs). Although first-half sales of the Telluride in the US market recorded an all-time half-year high of 73,602 units (+19.7% YoY), cost concerns stemming from a massive recall targeting 462,869 units of the Telluride suppressed profitability.

Meanwhile, the tire manufacturer Kumho Tire (KOSPI: 073240) disclosed an increase in investment for its new Hampyeong plant by 100 billion won, from the previous 660.9 billion won to 760.8 billion won. Its stock price hit the upper limit at +30.00% as expectations of benefiting from the Gwangju Semiconductor Mega Cluster overlapped. The sales proportion of high-inch tires expanded to 45.1% last year.

Market Signals

• Samyang Foods (KOSPI: 003230): Recorded a Q2 revenue of 749.1 billion won and an operating profit of 178.5 billion won, increasing by +35.4% and +48.6% respectively compared to the same period last year, proving its strong export trend.

• KRW/USD Exchange Rate: Closed at 1,498.9 won in the Seoul foreign exchange market last Friday (July 10), down 8.0 won from the previous day, falling below the 1,500 won mark.

• Simmtech (KOSDAQ: 222800): The consolidated Q2 operating profit is analyzed to be 50.4 billion won, surging 579.3% year-on-year, showing a product mix improvement effect due to the shipment of high value-added small-form factor substrates (SOCAMM).

• Iljin Electric (KOSPI: 103590): Its stock price rose +6.3% as it secured an extra-high voltage cable order worth 85 billion won in the UK.

Epoch View: Investment Implications

The expansion of global technology hardware and energy infrastructure is moving beyond the realm of expectations and transitioning into a phase of tangible order amounts and export performances. The successful listing case of a large semiconductor ADR in the US market and the daily average export performance of memory semiconductors showing a double-digit increase act as pillars supporting the fundamentals of domestic related value chains. However, the possibility of the monetary authority maintaining a macro tightening stance due to the expansion of commercial household debt and labor disputes in the manufacturing sector act as deterrent factors suppressing the upside of the domestic stock market index itself. In the current market where liquidity constraints have become apparent, the core of investment lies not in simply tracking indices, but in compressing investments into hardware and infrastructure value chains where large orders and earnings improvements are confirmed by numbers.

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