[Weekly Strategy] Clear Growth Potential or Undervalued Stock Prices

On the 13th, the KOSPI opened at 2,979.91, up 7.43 points (0.25%) from the previous trading day, at the Hana Bank dealing room in Jung-gu, Seoul. On the same day, the won-dollar exchange rate started at 1,186.5 won, down 4.0 won from the previous trading day. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Junho Hwang] The selling profit-taking by financial investors, which was the main driver of downward pressure on the KOSPI at the beginning of the year, subsided as of the 14th. Although concerns about supply and demand remain due to the upcoming listing of LG Energy Solution at the end of this month, the recent weakness of the dollar and the rebound of value stocks have highlighted the price attractiveness of our market, which has a high proportion of large export stocks.

On the 15th, Samsung Securities identified growth stocks in mobility and bio CMO as sectors to watch next week under these market conditions. In value stocks, they emphasized the need to focus on IT companies undergoing valuation reassessment due to diversification of their business portfolios.

Over the past week, LG Electronics and LG Innotek showed strong performance driven by issues related to autonomous driving, metaverse, and automotive electronics. The biggest reason was expectations for the Apple Car, but behind the rise was absolute price attractiveness. Due to profit improvement through business structure reorganization and the upward revision of multiples for new businesses such as automotive electronics, current valuations remain at past average levels. For these reasons, Samsung Securities recommended Samsung Electronics, Samsung Electro-Mechanics, LG Electronics, and LG Innotek as preferred stocks.

The market capitalization of LG Energy Solution was confirmed at 70 trillion won based on the public offering price. The emergence of a mega battery company has raised concerns about temporary supply and demand concentration. However, if a clear battery leader is established, the relative price attractiveness of previously undervalued battery companies is expected to be highlighted. Since the battery market is in the early growth stage, any adjustments due to supply and demand can be seen as good buying opportunities. Accordingly, Samsung Securities suggested Kia, SK Innovation, Korea Zinc, and Hyundai AutoEver as recommended stocks.

Samsung Biologics announced the expansion of its 5th plant at last week's JP Morgan Healthcare Conference. Accordingly, attention should be paid to securing facilities for cell and gene therapy CDMO in addition to the existing antibody therapeutic CMO. Researcher Seungjin Shin of Samsung Securities stated, "In the bio sector, it is necessary to respond focusing on CMO companies due to the expansion of the front market," and added, "In cyclical stocks, Hanwha Solutions, which is expected to see a turnaround in the solar power sector this year, is worth considering."

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