[R&E] Market Reopens Amid Strong Earnings in Semiconductor Back-end and K-Food; US 30-Year Treasury Yield at 5.3% and Oil Re-entering $90 are Variables

[R&E: Research & Epoch] This is News Epoch's signature report that forecasts a new era of investment by comprehensively analyzing global financial data and domestic securities firm research.

Global Market Brief

Warning lights have flashed for asset allocation strategies in the global financial market as the US long-term Treasury yield hit its highest level since 2007 and international oil prices surpassed the $90 per barrel mark. The direct trigger is the maximization of geopolitical instability in the Middle East following the expiration of the 60-day temporary ceasefire agreement (MOU) between the US and Iran without an extension. Adding to this were President Trump's threat to attack Oman and Iran's hardline remarks about blockading the Strait of Hormuz.

Accordingly, on the previous day at the New York Mercantile Exchange, the price of West Texas Intermediate (WTI) crude futures rose 2.55% from the previous day to $84.50 per barrel, and the global benchmark Brent crude closed up 2.65% at $90.87, crossing the $90 per barrel line. The US 30-year Treasury yield broke a new record since 2007 at 5.306%, driven by rising energy prices combined with surging European bond yields and the burden of massive corporate bond issuances by hyperscalers. On the other hand, due to the recent slowdown in employment and consumption indicators, the probability of a rate hike in September fell from 55% to 31% in just one week, bringing stability to short-term yields.

Due to this spike in long-term interest rates and valuation burdens, the large-cap S&P 500 index in the New York stock market fell 0.52% from the previous day to 7,745.06 points, and the tech-heavy Nasdaq Composite index also closed down 0.32% at 26,644.91 points. The blue-chip Dow Jones Industrial Average fell 0.51% from the previous day to 53,459.78 points, showing a concurrent decline. However, some memory semiconductors, including Micron (+4.13%), showed strength on Anthropic's aggressive revenue outlook and news of the US government's checks on Chinese-made memory.

Domestic Market Overview

The domestic stock market resumes trading today (August 18) after closing for the alternative holiday for National Liberation Day (August 17). On the previous trading day, last Friday (August 14), the KOSPI index closed at 6,977.94 points, up 2.42% from the previous day, continuing its upward trend for five consecutive trading days, and the KOSDAQ index also recorded an increase of 0.38% to 864.65 points. At the time, foreign investors solely net-purchased approximately 3 trillion won in the KOSPI market, leading the index surge centered around large-cap semiconductor stocks such as Samsung Electronics (+2.43%) and SK Hynix (+3.26%).

However, the surge in the US long-term Treasury yield and the rise in international oil prices that unfolded in the US market during the holiday are variables that will be reflected for the first time upon opening today. In the Seoul foreign exchange market, the USD/KRW exchange rate showed a downward stabilization trend from the 1,413.8 won level based on the previous trading day's closing price, but with the 1-month Non-Deliverable Forward (NDF) exchange rate recording 1,415.30 won, volatility in oil prices and interest rates leaves room to burden the won once again. Today's regular market is likely to see volatility unfold as short-term profit-taking sales emerge, centered around manufacturing sectors with high cost burdens, while a differentiated trend is expected for semiconductor back-end and export consumer goods with confirmed earnings visibility.

Key Industry Issues and Insights

Semiconductor Parts and Materials: Order Recovery in the Back-end Value Chain Amid HBM Trickle-down Effects
The global semiconductor industry's improvement and accelerating HBM demand are leading to upward earnings trends for small and medium-sized parts and materials companies. Hana Micron (KOSDAQ: 067310) reported a Q2 consolidated revenue of 683.2 billion won, up 101% year-on-year, and an operating profit of 142.3 billion won (OPM 20.8%), up 371%, exceeding the market consensus by 63%. The key drivers of the profit margin increase are the memory selling price hike resulting from the rise in DRAM spot prices at its Brazilian subsidiary and the Vietnamese subsidiary entering a normal track. Printed Circuit Board (PCB) manufacturer TLB (KOSDAQ: 356860) also met the consensus with a Q2 consolidated revenue of 88.2 billion won (+37.8% YoY) and an operating profit of 12.8 billion won (+86.3% YoY). Notably, its order backlog at the end of Q2 surged from 53.9 billion won in the previous quarter to 131.8 billion won, breaking an all-time record. On the other hand, semiconductor materials company Soulbrain (KOSDAQ: 357780) recorded a Q2 consolidated revenue of 312.0 billion won (+36% YoY) and an operating profit of 46.0 billion won (+128% YoY, OPM 15%). While the effect of incorporating affiliate DNF into the consolidated financials supported top-line growth, the rise in utilization rates due to the operation of new DRAM fabs (P4, M15X) and conversion investments in Xi'an NAND drove the growth in materials revenue.

Food and Beverage: Margin Defense Through K-Food's Export Territory Expansion and Pricing Power
Concerns about the shrinking domestic market are being offset by global export growth. Samyang Foods (KOSPI: 003230) reported a Q2 consolidated revenue of 770.3 billion won, growing 39.3% year-on-year, and an operating profit of 176.2 billion won (OPM 22.9%), up 46.7%, meeting the market consensus. Export revenue recorded 645.8 billion won, expanding the overseas proportion of total revenue to 83.8%. In particular, US subsidiary revenue grew 53% year-on-year driven by channel expansion in Walmart and Costco, and Chinese revenue also increased by 44% centered on snack shops and online, leading the top-line expansion. Favorable exchange rate effects and the downward stabilization of wheat flour prices contributed to cost stability, while low price sensitivity based on strong brand power proved its margin defense capabilities in the face of geopolitical risks.

Market Signals

• US 30-Year Treasury Yield Highest Since 2007: The US 30-year Treasury yield hit 5.306%, climbing to its highest level since 2007, evidencing long-term inflation and fiscal burdens.

• Resumption of Oil Price Uptrend: Following the failure to extend the temporary ceasefire agreement between the US and Iran, the Brent crude price rose 2.65% from the previous day to $90.87 per barrel, heightening supply concerns.

• TLB Order Backlog at Record High: TLB's order backlog at the end of Q2 surged to 131.8 billion won from 53.9 billion won in the previous quarter, achieving an all-time high and reflecting pent-up demand for AI substrates.

• Samyang Foods Overseas Revenue Proportion at 83.8%: Samyang Foods' Q2 export volume expanded to 645.8 billion won, reaching an all-time high for its overseas share of total revenue.

Epoch View: Investment Implications

The breaking of the US long-term Treasury yield's high and international oil's re-entry into the $90 per barrel range are macroeconomic constraints that add to the cost burden across downstream industries. Rather than chasing purchases centered on technology and growth stocks where valuation burdens are increasing, a strategy of compressing the portfolio into sectors that have secured a thoroughly solid order backlog and pricing power is required. The steep order recovery pace of the semiconductor back-end value chain and the margin defense capability of export consumer goods represented by K-Food, as proven in Q2 earnings, show where earnings visibility is clearest. In a phase of uncertainty, reliable indicators are not simple sentiment but cash flow and order metrics. A response focused on export-led companies that drive revenue growth without qualitative damage to profits, and leading companies in the core component supply chain, will serve as a safety net.

This content was generated by News Epoch's proprietary AI algorithm, which tracks and analyzes public data from major domestic securities firm research centers and global financial media in real time. We clarify that this is an objective summary based on collected data and does not constitute a solicitation or recommendation for investment in any specific stock.