[R&E] KOSPI Rebounds 0.46% Despite Net Selling by 3 Major Entities... 'Samsung-Hynix' Treasury Stocks Single-handedly Supported the Market

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

Global Market Brief

The New York stock market closed lower yesterday as reignited inflation concerns and the burden of rising treasury yields overlapped. The Dow Jones Industrial Average closed at 53,185.90 points, down 0.70% from the previous trading day, the S&P 500 index fell 0.33% to 7,686.14 points, and the Nasdaq Composite Index retreated 0.12% to close at 26,370.89 points. However, the semiconductor sector diverged from the broader market decline, with the Philadelphia Semiconductor Index rising 0.57% due to the inflow of bargain hunting driven by oversold perceptions.

The bond market was the epicenter of the pressure. The yield on the 10-year US Treasury note rose 3.2 basis points to 4.75%. Based on the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of a September interest rate hike by the Federal Reserve (Fed) surged from 35.4% to 65.0%, stimulating concerns over a prolonged tightening. The remarks made by Fed Chair Kevin Warsh at Jackson Hole on the 28th, pinpointing price stability as the top priority, have now begun to be reflected in prices.

Energy also added to inflationary pressures. West Texas Intermediate (WTI) crude rose 2.8% to $85.8 per barrel, and Brent crude increased 2.71% to $90.49, breaking through the $90 mark. The combination of simultaneously rising interest rates and oil prices is heavier than a single negative factor in that it pressures both valuations and costs.

Domestic Market Overview

Yesterday, the domestic stock market rebounded as other corporations single-handedly stepped up to buy in a market where three out of the four investment entities were selling. The KOSPI index closed at 6,820.02 points, up 31.14 points (0.46%) from the previous trading day, recovering its losses in just one day. On the other hand, the KOSDAQ index diverged, closing down 0.49% at 834.29 points.

The supply and demand table is everything for this day.

It is notable that even individuals turned to net selling. It is uncommon for the index to rise in a market where foreigners, institutions, and individuals are selling simultaneously, and it was the companies' own treasury stocks that filled the void.

The scale supports this. SK hynix announced that it would acquire and cancel 40 trillion won worth of shares on the market from August 20 to November 19, and Samsung Electronics disclosed that it would purchase 15 trillion won worth of shares for employee stock compensation from August 24 to November 21. The combined total is 55 trillion won. The cumulative net buying on the KOSPI by other corporations from August 20 to 28 was 10.187 trillion won, and if added up to the 31st, it reaches approximately 11.8 trillion won.

In the Seoul foreign exchange market, the USD/KRW exchange rate closed the weekly trading at 1,368.6 won, down 3.9 won from the previous trading day. Based on the closing price, this is the lowest level in about 13 months since July 8 last year (1,367.9 won). In early trading, it exceeded 1,380 won in the aftermath of Chair Warsh's hawkish remarks, but as the end of the month approached, demand to convert export proceeds into won concentrated mainly around semiconductor companies, giving up all the gains.

The fact that rising interest rates and a strong won appeared on the same day is worth noting. Normally, when US interest rates rise, the dollar strengthens, but on this day, month-end negotiation volumes suppressed that pressure. This is a phase where seasonal supply and demand temporarily masked the macro direction, and once the negotiation volumes are exhausted in September, the direction could be tested again.

Key Industry Issues and Insights

Shipbuilding Equipment: Margins Created by Order Backlog, and Capacity Expansion

LNG carrier insulation material companies have entered a peak profitability phase. Hankuk Carbon (KOSPI: 017960) broke its all-time record with an operating profit margin of 20.1% in the first half, and its Q2 operating profit margin exceeded 20% for the first time since 2020 at 20.7%. This is the result of a 7.3 percentage point improvement in the cost of sales ratio compared to the same period last year. With an order backlog of 1.68 trillion won for LNG cargo containment panels, it has expanded its annual insulation material production capacity to a scale of 30 to 35 vessels.

Dongsung Finetec (KOSDAQ: 033500) recorded a first-half operating profit of 55.8 billion won (+89.4% YoY) and an operating profit margin of 14.2%. Its order backlog of 2.041 trillion won at the end of June amounts to 2.5 years of annual revenue. Ship deckhouse and LPG tank manufacturer Sejin Heavy Industries (KOSPI: 075580) also reported a Q2 operating profit of 20.4 billion won (+131.8% YoY) and an operating profit margin of 21.8%, reaching a quarterly high.

What is commonly observed among the three companies is that it was not an increase in revenue, but an improvement in the cost ratio that pushed up margins. Volumes ordered during a period of high ship prices are now being recognized as revenue, while raw material prices have stabilized, leaving the gap between them directly as profit. However, this structure is dependent on the speed at which the backlog is exhausted. What needs to be checked now is not the height of the margin rate, but whether the unit price of new orders can sustain that height. The capacity expansion is interpreted as a signal from the companies that they will not defer that judgment.

Pharmaceuticals & Bio: Samsung Biologics, Weighing Dilution and Expansion

Samsung Biologics (KOSPI: 207940) saw its stock price drop by 7.0% on the 28th, wiping out about 5 trillion won in market capitalization in the aftermath of its decision to proceed with a 3 trillion won shareholder-allotted paid-in capital increase, but it rebounded 2.15% yesterday to solidify its bottom. The initiation of a tender offer for the acquisition of Polypeptide Group (estimated amount of 2.71 trillion won) to strengthen global CDMO capabilities acted as the basis for the rebound.

Including this acquisition, the company plans to invest a total of 15.4 trillion won by 2034, such as the expansion of Plant 6, and will intensively execute 64% of this by 2029. Choosing a paid-in capital increase raises the debt ratio from 51% to 87%, but avoids the interest expenses of more than 132.3 billion won per year that would occur if financing through corporate bonds (based on a 4.41% AA rating).

The two days where the stock price dropped 7% due to the paid-in capital increase and then recovered on the acquisition news show what the market is weighing. What was questioned was not the fundraising itself, but where the money was going. Since dilution is a fixed cost and an acquisition is an uncertain return, future stock prices are highly likely to be linked to the speed at which the Polypeptide acquisition translates into CDMO orders.

Energy & BESS: Doors Opened by Regulation, and Contracts Already Entered

US power grid security regulations are providing long-term momentum to the domestic battery industry. Under Executive Order 14420, detailed rules restricting imports of BESS (Battery Energy Storage Systems) are scheduled to be finalized by December 24. With the US reliance on Chinese BESS imports reaching 59%, LG Energy Solution (KOSPI: 373220) and Samsung SDI (KOSPI: 006400), which hold North American market shares of 13.6% and 6.1% respectively, are highly likely to benefit indirectly.

It is not just expectations. SK On translated these benefits into a contract by signing an LFP battery cell supply agreement worth approximately 1.5 trillion won (9GWh) with NeoVolta in the US. In yesterday's stock market, L&F (KOSPI: 066970) surged 8.8% and POSCO FUTURE M (KOSPI: 003670) surged 7.62%, while LG Energy Solution (+2.2%) and Samsung SDI (+1.1%) also rose.

It is worth noting that materials rose more significantly than cells. Volumes opened up by regulation are allocated to cell makers first, but in the expansion cycle, pricing power is recovered first by materials. However, given that the basis for this rise is detailed rules that are yet to be finalized, December 24 will be the turning point for validation.

Construction: A Phase Where Ordering Plans and Price Recovery Overlap

Korea Land and Housing Corporation (LH) presented an ordering plan of 14.9 trillion won in 2026, 25.7 trillion won in 2027, and 30 trillion won annually from 2028 to 2030. In particular, about 10 trillion won (5.2 trillion won for new apartments, 4.8 trillion won for facility construction) is scheduled to be concentrated from September to December this year, backing up the securing of order backlogs in the second half.

Prices are also catching up. Seoul's weekly apartment sale prices rose for 83 consecutive weeks, climbing 0.30% from the previous week, while the Seoul metropolitan area (0.22%) and nationwide (0.11%) also remained solid. Construction sector stock prices surged 15.6% as of the 4th week of August, generating an excess return of 17.4 percentage points against the KOSPI. GS E&C (KOSPI: 006360) and DL E&C (KOSPI: 375500), which are yielding results in the data center sector, are cited as preferred stocks.

Construction is an industry where multiples recover only when orders and prices move simultaneously. Right now is the phase where those conditions are being met together for the first time, and the key is the conversion rate of the 10 trillion won between September and December into actual contracts.

Market Signals

• 55 Trillion Treasury Stock, 3-Month Program — SK hynix 40 trillion won (Acquire and cancel from 8/20 to 11/19) + Samsung Electronics 15 trillion won (Employee stock compensation from 8/24 to 11/21). Cumulative net buying on the KOSPI by other corporations was 10.187 trillion won from 8/20 to 28, and approximately 11.8 trillion won by the 31st. Company disclosures, Korea Exchange

• KRW/USD 13-Month Low — Down 3.9 won to 1,368.6 won. Lowest since July 8 last year (1,367.9 won). Exceeded 1,380 won in early trading but gave up gains due to month-end negotiation volumes. Seoul Foreign Exchange Market

• 65% Probability of September Hike — Surged from 35.4% to 65.0% based on the CME FedWatch Tool. Chair Warsh's Jackson Hole remarks began to be reflected. CME FedWatch

• Brent Crude Breaches $90 — WTI $85.8 (+2.8%), Brent Crude $90.49 (+2.71%). Interest rates and oil prices rising together. International Oil Prices

• LH Foresees 10 Trillion Won Orders from Sept-Dec — 5.2 trillion won for new apartments + 4.8 trillion won for facility construction. Plans 25.7 trillion won in 2027, and 30 trillion won annually from 2028 to 2030. LH

Epoch View: Investment Implications

The record left by the market on this day is not the direction of the index, but the singularity of the entity that created that direction. In a market where foreigners, institutions, and individuals were all selling, other corporations alone bought 1.5433 trillion won to push up the index. Treasury stock purchases are powerful, but they represent supply and demand with a set total amount and deadline. The 55 trillion won program ends in mid-November, and about 11.8 trillion won has already been executed. This is a phase where the remaining purchasing capacity and remaining period, not valuation, define the bottom of the index, and those two axes are shrinking every day.

In the macro environment, conflicting signals overlapped. On a day when the probability of a September rate hike jumped to 65% and Brent crude topped $90, the won strengthened to its lowest exchange rate in 13 months. This is the result of the macro direction and seasonal supply and demand acting in opposite ways, and this buffer will disappear in September when month-end negotiations conclude. It is safer to read the current exchange rate stability as being created by timing, rather than by structure.

Within sectors, "what is it anchored to" remains the standard. Margins for shipbuilding equipment are fixed by an already signed order backlog of 2.5 years, expectations for construction hang on the ordering plans presented by LH, and the rise in batteries relies on December's detailed rules that are yet to be finalized. Upward logic holds for all three, but the anchoring strength weakens in that order. In a phase where both interest rates and oil prices are rising, that order immediately becomes the order of defensive strength.

This content was generated through 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. It is an objective summary based on collected data, and we clarify that it is not a solicitation or recommendation to invest in any specific stock.