[R&E] KOSDAQ Drops 4.63% Amid KOSPI's 0.88% Rise, Driven by Samsung Electronics' Shareholder Return Disclosure and LCC Integration Merger Agreement

[R&E: Research & Epoch] This is News Epoch's signature report that integrates and analyzes global financial data and domestic securities firm research to shed light on a new era of investment.

Global Market Brief

Last Friday, the New York stock market closed higher, driven by expectations of U.S. economic recovery and an influx of bottom-fishing focused on technology stocks. The large-cap S&P 500 index rose 0.43% from the previous trading day to record 7,674.37 points, and the tech-heavy NASDAQ Composite index also ended trading at 26,180.46 points, up 0.43%. The blue-chip Dow Jones Industrial Average closed at 53,277.01 points, a 0.98% increase. The U.S. S&P Global Services PMI for August recorded 56.8, exceeding market expectations (53.9), which raised hopes for a soft economic landing. However, this stimulated concerns about additional tightening by the Federal Reserve (Fed), pushing the U.S. 10-year Treasury yield up to 4.7339% (+3.0bp). Despite the upward pressure on Treasury yields, buying of oversold stocks in the tech sector flowed in, supporting the index's rise.

Domestic Market Summary

Last Friday, the domestic stock market showed an extremely polarized trend as the strength centered on large-cap stocks intersected with massive selling in the KOSDAQ market. The KOSPI index closed at 6,912.95 points, up 0.88% from the previous trading day, while the KOSDAQ index fell 4.63% to record 801.94 points. In the Seoul foreign exchange market, the won-dollar exchange rate closed at 1,385.8 won, down 8.5 won from the previous trading day. As the shareholder return plans of large semiconductor companies took center stage in the market, foreign investors net sold 171.1 billion won in the KOSPI market, but top market-cap semiconductor stocks such as Samsung Electronics (+3.87%) defended the index. On the other hand, the KOSDAQ market plummeted as pharmaceutical and bio sectors weakened together and dumping of small and medium-cap stocks poured out, triggering a sell sidecar. As of the pre-market opening on the morning of August 24, the regular domestic market is expected to inherit the mild rebound trend of the U.S. stock market from last Friday, while also showing a differentiated trend that mitigates the extreme supply and demand concentration among sectors.

Key Industry Issues and Insights

Enhancement of Shareholder Value in Semiconductors and Large-Cap Stocks: Samsung Electronics' Shareholder Returns and Capital Reallocation
Domestic large-cap stocks are leading the constitutional improvement of the overall market by raising the level of shareholder-friendly policies to an all-time high. Samsung Electronics (KOSPI: 005930) announced that it has set the estimated scale of shareholder returns for 2026 at up to 110 trillion won (90 trillion to 110 trillion won). This is approximately five times the previous record shareholder return amount of 2020 (20.3 trillion won). Along with this, the company plans a cash dividend of about 30 trillion won during the third quarter, and resolved to proceed with the purchase of 15 trillion won of treasury stock (0.9% of issued shares) for employee compensation. The reduction of circulating shares through the purchase of treasury stock proves that it will lead to an increase in per-share value in the future.

The proactive capital reallocation movements of large-cap stocks are also accelerating. Samsung SDI (KOSPI: 006400) decided to sell about one-third (33%) of its stake in Samsung Display for 4.45 trillion won. The proceeds from the sale are scheduled to flow in as cash on August 27. The secured large-scale financial resources are expected to be utilized as ammunition for expanding next-generation electrification battery production lines and research and development (R&D) investments, which is analyzed as a preemptive response to consolidate its leading position in the global market. In addition, Samsung Electronics' large-scale dividend expansion induces a trickle-down effect to its affiliates. In the case of Samsung C&T (KOSPI: 028260), analysis suggests that its dividend per share (DPS) could increase to 8,550 won (+205%) in 2026 thanks to Samsung Electronics' third-quarter dividend expansion. This proves that a virtuous cycle of enhancing controlling shareholder value is in operation.

Power Transmission, Distribution, and Energy Value Chain: Copper Prices Break Record Highs and Data Center Infrastructure Benefits Accelerate
As the expansion of global power infrastructure and copper supply shortages intertwine, the trend of earnings improvement in the domestic power transmission and distribution equipment value chain is becoming evident. Based on the London Metal Exchange (LME), the price of copper recorded 14,215.5 dollars per ton, rising 1.3% from the previous trading day and continuing its high-flying march. Structural supply bottlenecks resulting from production disruptions at major copper mining companies are supporting the price strength.

Rising raw material prices and the demand for power facilities at North American AI data centers are leading to large-scale orders for domestic cable companies. Gaon Cable (KOSPI: 000500) signed a bus duct supply contract worth 200 billion won targeting a U.S. AI cloud data center. The order for bus ducts, which are highly efficient core materials for power transmission, represents the high reliability of domestic power equipment in the North American market. Furthermore, LS ELECTRIC (KOSPI: 010120) also signed a data center power distribution solution supply contract worth 34 million dollars with Bloom Energy of the U.S., expanding its market share in the global power transmission and distribution market. This suggests that Korean companies are settling as key partners in the power infrastructure supply chain essential during the artificial intelligence transition period.

Aviation Industry Reorganization: Birth of a Mega LCC Following the Integration Contract Among Three LCCs
The domestic low-cost carrier (LCC) industry has faced massive restructuring and tectonic shifts for survival. Jin Air (KOSPI: 272450) signed a merger contract with Air Busan and Air Seoul. Taking the form of an absorption merger of Air Busan (KOSPI: 298690) and the unlisted Air Seoul, the merger date was confirmed as March 16, 2027. The merger values for this deal were calculated at 269.1 billion won for Jin Air, 240.5 billion won for Air Busan, and 19.1 billion won for Air Seoul, respectively. Once the merger procedures are completed, the integrated Jin Air will transform into a mega LCC possessing 59 aircraft and an annual revenue scale of 2.5 trillion won.

The integration of the three LCCs is analyzed to produce the effect of increasing the operational efficiency of domestic short-haul routes, which were in a state of oversupply, and significantly reducing overlapping costs. However, the exercise of appraisal rights by minority shareholders during the merger process is a major variable. The appraisal right prices were set at 5,244 won for Jin Air and 1,495 won for Air Busan, and the maximum total amount of potential appraisal claims by minority shareholders reaches up to 224.7 billion won. This figure slightly exceeds the 200 billion won threshold for terminating the merger agreement between the two companies. Although future stock price trends will be the final key to completing the merger, the economies of scale that will be demonstrated after integration imply a strengthening of the domestic aviation industry's global competitiveness.

Market Signals

• Samsung Electronics' Shareholder Return of up to 110 Trillion Won: Samsung Electronics set its 2026 shareholder return scale at 90 trillion to 110 trillion won, and plans a cash dividend of 30 trillion won during the third quarter.

• Copper Prices Break Record Highs: The LME-based copper price recorded 14,215.5 dollars per ton (+1.3%), continuing its strength amid supply bottlenecks.

• Gaon Cable Wins 200 Billion Won Order: Gaon Cable signed a bus duct supply contract for a U.S. AI cloud data center.

• Jin Air Resolves to Integrate 3 LCCs: Jin Air signed a merger contract with Air Busan and Air Seoul, and the merger date was confirmed as March 16, 2027.

Epoch View: Investment Implications

Samsung Electronics' shareholder return policy of up to 110 trillion won, Samsung SDI's asset sale of 4.4 trillion won, and the signing of the integration contract among three LCCs demonstrate that Korean conglomerates are simultaneously executing the maximization of shareholder value and structural constitutional improvement. The efficient allocation of capital and integration centered on core businesses act as strong defense mechanisms that support the intrinsic value of Korean companies even amidst concerns over a global macroeconomic slowdown. Ultimately, the structural exit for the undervalued Korean stock market relies not merely on a simple rebound in business conditions, but on the execution capability of such active capital reallocation and shareholder returns.

This content was generated through News Epoch's exclusive AI algorithm, which tracks and analyzes public data from research centers of major domestic securities firms and global financial media in real-time. It is an objective summary based on collected data and does not constitute an investment solicitation or recommendation for any specific stock.