"When the Market Changes, Investment Styles Must Also Adapt"

[Asia Economy Reporter Junho Hwang] "Now is the time to thoroughly verify stock prices and valuations."

On the 5th, Shin Seung-jin, a researcher at Samsung Securities, said in a weekly outlook, "When the market environment changes, investment styles must also change."

During the liquidity-driven market of the past two years, companies' growth stories were in the spotlight. However, now if a company's performance fails to meet market expectations, it faces harsh evaluation. Accordingly, portfolios should be concentrated on thoroughly undervalued value stocks rather than high-valuation companies.

The stock price adjustment in the mobility sector caused by LG Energy Solution can be an investment opportunity. The key companies are LG Energy Solution, the leader in secondary batteries, and SK Innovation, which is in an absolutely undervalued zone. Mobility, with a clear picture of earnings growth, can be considered an essential item this year as well.

Due to the global tech stock slump, domestic IT companies' prices are also weak. However, the relative resilience of our tech companies' stock prices can be attributed to valuation attractiveness and new growth momentum. The full-scale opening of the foldable smartphone market and the expansion of big tech companies' investments to dominate the XR/autonomous vehicle market can be seen as a catalyst to re-rate Korean IT companies that have been undervalued so far.

It is also necessary to increase interest in interest rates and reopening. The recent market environment changes are due to the Federal Reserve's interest rate hikes and the possibility of early implementation of QT (quantitative tightening) starting this year. Interest rate hikes to control inflation and the gradual withdrawal of historically abundant liquidity are just a matter of timing. Additionally, after the Omicron variant virus in the first quarter, the possibility of endemicity is being mentioned. Researcher Shin stated, "A preemptive buying strategy for banks/reopening/cyclical stocks is also effective."

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