LG Chem and NC Hit by Negative News, Retail Investors Rush to Buy the Dip

Largest Net Buying Since the 23rd of Last Month
Contrary Moves by Foreigners and Institutions with Net Selling

[Asia Economy Reporter Minji Lee] Individual investors are actively buying up stocks of companies whose share prices have sharply declined due to a series of adverse factors, engaging in bargain hunting. While securities experts are effectively issuing sell recommendations for companies like LG Chem and NCSOFT, individual investors are placing higher value on expectations for future stock price recovery and are buying aggressively.

According to the Korea Exchange on the 3rd, the stocks most purchased by individual investors from the 23rd of last month to the day before were LG Chem (991.7 billion KRW) and NCSOFT (812.1 billion KRW). During the same period, foreign investors sold LG Chem and NCSOFT stocks worth 913.1 billion KRW and 560.1 billion KRW respectively, while institutional investors net sold 110.8 billion KRW and 264.3 billion KRW worth of shares.

LG Chem and NCSOFT have each dominated as the largest market cap leaders in the secondary battery and gaming sectors respectively, but recent concerns over declining earnings have caused their stock prices to fall by approximately 10% and 24%. Their stock prices have plunged 32% (peak 1,050,000 KRW) and 40% (1,048,000 KRW) respectively from their yearly highs.

In LG Chem’s case, on the 21st of last month, concerns over additional provisions following the recall decision by General Motors (GM) in the U.S. (Chevrolet Bolt electric vehicle) triggered the stock price decline. Furthermore, speculation that the LG Energy Solution IPO might be postponed until next year intensified the downward trend. For NCSOFT, the earnings outlook sharply declined after the highly anticipated second half release, ‘Blade & Soul 2,’ was analyzed to have failed to meet user expectations.

Individual investors judged that the 30-40% plunge in these leading stocks presented an opportunity, but the securities industry advises caution in investing until business uncertainties are resolved. Jeon Yujin, a researcher at Hi Investment & Securities who lowered LG Chem’s target price to 1,000,000 KRW, stated, "Rather than hastily viewing the valuation drop as a bargain buying opportunity, confirming competitiveness is important," adding, "Repeated recall incidents lead to increased provisions, raising doubts about medium- to long-term profitability."

Regarding NCSOFT, reports lowering investment opinions to ‘neutral’?which could signal a sell?are emerging one after another. Kim So-hye, a researcher at Hanwha Investment & Securities who set a target price of 700,000 KRW, explained, "Lineage sales in Japan and Taiwan are also declining, forecasting poor third-quarter earnings," and added, "The visibility of success for the next new release, Lineage 2, will act as a variable for stock price increases."

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