Korea Investment & Securities: "Travel and Leisure Is the Sector to Watch Ahead of the Holiday"

On September 30, Korea Investment & Securities emphasized the strategic importance of identifying sectors likely to rise after the Chuseok holiday, recommending that investors pay attention to the 'travel and leisure' sector.

Park Kihun, a researcher at Korea Investment & Securities, stated in a report titled "Chuseok Holiday Essentials" released on this day, "The travel and leisure sector is benefiting from several positive factors, including Chuseok, China’s Golden Week, and the allowance of visa-free entry for Chinese tourists."

First, Park explained, "Considering the supply-demand gap before the holiday and the announcement of key indicators such as employment during the holiday period, there are concerns that volatility may increase in the stock market once trading resumes after the holiday." He added, "While the index may move sideways in the short term, the downside remains solid, so it is important to pre-select sectors that are likely to resume their upward trend after the holiday."

He particularly noted that, despite the weakness of the Korean won, foreign investors are net buyers on the KOSPI, and there is a noticeable accumulation of Samsung Electronics shares within the semiconductor sector. "Compared to previous years, when trading volume typically contracted slightly to the 8 trillion to 9 trillion won range ahead of Chuseok, concerns about a supply-demand gap are not significant. While short-term corrections are possible, there is little risk of a sharp decline," he assessed.

Accordingly, the strategy for investors ahead of the Chuseok holiday should not be 'defensive,' but rather to 'select sectors with valid upward momentum.' Park identified semiconductors, displays, travel and leisure, and construction as sectors with upwardly revised operating profit estimates ahead of the third-quarter earnings season.

However, he pointed out, "For semiconductors and displays, much of the positive outlook is already reflected in share prices, resulting in valuation pressures. For construction, investment sentiment has weakened following the announcement of the Comprehensive Labor Safety Measures, making it difficult to expect short-term momentum." He continued, "In the case of travel and leisure, there are positive catalysts such as the Golden Week and the allowance of visa-free entry for Chinese tourists. Ultimately, at this point, the sector worth focusing on is travel and leisure."

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