From "National Stock" to "Love-Hate Stock"... Individual Investors' Agony After Betting 24 Trillion on 80,000 Won Electronics

[Asia Economy Reporter Lee Seon-ae] Despite a second-quarter earnings surprise, Samsung Electronics' stock price remained stuck at the "80,000 won level" without any movement. Once loved by individual investors as the "nation's leading stock," it has now fallen into the status of a "leading stock filled with both love and hate." The reason for the high dissatisfaction among individuals is that it is no exaggeration to say that half of this year's stock investment funds were all-in on Samsung Electronics.

According to the Korea Exchange on the 8th, Samsung Electronics opened at 81,100 won that day. On the previous day, it closed at 80,800 won, down 0.49%. Before the market opened, it announced that its second-quarter sales were 63 trillion won, an 18.94% increase from the same period last year, and operating profit was 12.5 trillion won, a 53.4% increase, but the stock price did not respond. In fact, the second-quarter results were an earnings surprise. Sales were the highest ever, and operating profit was the largest since 17.57 trillion won in the third quarter of 2018. Even though operating profit exceeded market expectations of about 11 trillion won by about 10%, Samsung Electronics' stock price showed a frustrating trend.

Institutional and foreign investors turned their backs on Samsung Electronics. On the 7th, they sold a net amount of 205.1 billion won and 33.1 billion won, respectively. These sales were absorbed by individual investors. Individuals bought a net amount of 232.3 billion won. This was based on the belief that it would become the "100,000 won stock." This belief started at the beginning of this year. At the beginning of the year, securities firms raised their target prices above 100,000 won on the forecast of a "semiconductor supercycle," which led to net buying by individuals. In the first half of this year, individuals net bought 53.436 trillion won worth of domestic stocks, with more than 55% of that amount going to Samsung Electronics. The net buying amount reached 23.8172 trillion won.

Currently, there is some concern in the securities industry about Samsung Electronics. The uncertainty about the semiconductor cycle triggered by inventory increases and oversupply concerns is analyzed to be limiting the stock price rise.

The appropriate price range suggested by 19 securities firms is from 94,000 won (Hi Investment & Securities) to 115,000 won (Korea Investment & Securities). Among them, recently, three firms?Hyundai Motor Securities (-9.09%), eBest Investment & Securities (-5.00%), and Hana Financial Investment (-9.01%)?have lowered their target prices. In late May, Shinhan Financial Investment (120,000 won → 105,000 won), Hana Financial Investment (111,000 won → 101,000 won), and Hi Investment & Securities (100,000 won → 92,000 won) also lowered their target prices.

Ultimately, the comeback of foreign investors is expected to determine the direction of Samsung Electronics' stock price. Foreign investors have net sold nearly 18 trillion won in the KOSPI market this year, of which nearly 12 trillion won was Samsung Electronics. The foreign ownership ratio of Samsung Electronics has fallen from 55.72% at the beginning of the year to 53.59%. Park Seung-young, a researcher at Hanwha Investment & Securities, said, "If global inflation concerns ease, foreign investors will start buying Samsung Electronics."

However, there are also voices that this concern is excessive. Kim Un-ho, a researcher at IBK Investment & Securities who maintained the existing Samsung Electronics target price of 110,000 won, predicted, "As DRAM and NAND prices continue to rise, operating profit will steadily increase until the third quarter." Kim Dong-won, a researcher at KB Securities, also emphasized, "Considering that Samsung Electronics' operating profit forecast exceeds 30 trillion won in the second half, the possibility of a stock price rebound is high." Song Myung-seop, a researcher at Hi Investment & Securities, predicted, "If Samsung Electronics acquires a company that can significantly strengthen its weaknesses at a reasonable price through mergers and acquisitions (M&A) mentioned in the last conference call, there will be a revaluation of its value due to strengthened competitiveness."

This content was produced with the assistance of AI translation services.