Where Is the End of '50,000 Electronics'?

Samsung Electronics Declines for 8 Consecutive Trading Days
Possibility of Further Drop

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Samsung Electronics, the national stock, has been trading at the ‘50,000 won level’ for eight consecutive trading days. Individual investors see this as a buying opportunity at the bottom and continue to buy, but foreigners are selling, and with the securities industry's outlook not bright, there is also a possibility of further decline.

As of 9:02 a.m. on the 7th, Samsung Electronics was trading at 56,500 won, down 1.05% from the previous trading day. Samsung Electronics has fallen for five consecutive trading days. This is close to the previous low (57,000 won on July 4). Samsung Electronics’ stock price has fallen about 30% since the beginning of this year.

Since August 29, Samsung Electronics has been stuck at the ‘50,000 won level’ for eight consecutive trading days. Foreigners’ selling pressure has held back the stock price. Foreigners have been net sellers of Samsung Electronics every day this month, selling a total of 768.5 billion won over the past four trading days. This contrasts with individual investors who bought 1.2668 trillion won during the same period. As of this date, the foreign ownership ratio of Samsung Electronics is 49.71%, falling below 50% for the first time in six years since April 28, 2016 (49.59%).

Individual investors continue their buying rally, seeing Samsung Electronics as a bottom-buying opportunity, but the securities industry's outlook is not optimistic. This is due to a decline in semiconductor demand caused by a global economic slowdown. According to the Ministry of Trade, Industry and Energy’s ‘August 2022 Export-Import Trends,’ semiconductor exports decreased by 7.8% year-on-year due to the impact of worsening global demand and price declines. This marks the first decline in 26 months. Semiconductors account for about 20% of South Korea’s total exports.

Accordingly, earnings forecasts are also being revised downward. According to financial information provider FnGuide, Samsung Electronics’ 2022 annual operating profit forecast is 54.2312 trillion won, down from 54.334 trillion won a month ago. The operating profit forecast for Samsung Electronics next year was also lowered from 50.484 trillion won to 49.8895 trillion won during the same period.

Nam Dae-jong, a researcher at Ebest Investment & Securities, said, "Production costs are rising due to inflation, and consumption capacity is weakening due to steep interest rate hikes." He added, "This is expected to lead to a decline in sales in the components division, so for the time being, rather than aggressive buying, it would be appropriate to invest by exploring the bottom."

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