Foreign investors net bought select non-semiconductor Korean stocks on July 13 despite driving the KOSPI index down 8.95% through ₩1.8795 trillion in net selling concentrated in semiconductor shares. The buying targeted companies with rising earnings consensus in sectors including power equipment, IT hardware, and holding companies. Analysts attributed the shift to unwinding semiconductor concentration that had dominated Korean equity trading and stabilizing won-dollar exchange rates, creating opportunities in oversold stocks with improving fundamentals.
Foreign Investors Concentrated ₩1.8795 Trillion Selling in Semiconductor Stocks on July 13
On July 13, foreign investors net sold ₩1.8795 trillion worth of shares on the Korea Exchange, with 98.17% (₩1.8451 trillion) concentrated in the electrical and electronics sector. Three semiconductor-related stocks accounted for the majority: SK Hynix (₩1.447 trillion net selling), Samsung Electronics (₩193.6 billion), and Samsung Electro-Mechanics (₩140.6 billion). Of the 24 sectors tracked by Korea Exchange, 12 sectors recorded foreign net selling on July 13. Accounting for the dual classification of semiconductor stocks in both electrical/electronics and manufacturing sectors, more than half of all sectors showed foreign net buying despite the overall market selloff, according to market data.
Semiconductor Trading Concentration Declines from 62.9% Peak This Month
The combined trading volume of Samsung Electronics and SK Hynix as a percentage of total Korea Exchange trading volume has declined this month after peaking at 62.9% on July 3. The concentration ratio fell to 54.6% on July 10 and 59.3% on July 13, down from the 60% range maintained through last month. Kim Dae-joon, researcher at Korea Investment & Securities, stated that the won-dollar exchange rate stabilization, which had been the main driver of indiscriminate foreign selling, is contributing to the unwinding of semiconductor concentration. Kim noted that sectors with strong earnings improvement trends, including IT hardware and holding companies, had suffered excessive selling despite superior fundamentals.
LS Electric Operating Profit Consensus Raised 10.6% Despite 44.9% Stock Price Drop
LS Electric, identified as a leading stock in the power equipment sector, saw its operating profit consensus for next year rise 10.6% from ₩833.8 billion to ₩933.8 billion over the past three months, according to securities firm estimates. The stock price, however, dropped 44.9% from its May peak. Power equipment companies are positioned as a core bottleneck in the artificial intelligence value chain, with multiple Korean companies holding global market competitiveness in the sector. Korea Investment & Securities identified HD Hyundai Heavy Industries, Hanwha Aerospace, Hanmi Semiconductor, Daewoo Engineering & Construction, and Hanwha Corporation as oversold stocks combining three factors: significant price decline from recent peaks, rising earnings per share consensus, and foreign net buying inflows.
LG Innotek Receives ₩645 Billion Foreign Net Buying This Month
LG Innotek recorded ₩164 billion in foreign net buying on July 13 despite the broader market selloff, bringing total foreign net purchases this month to ₩645 billion. The company's 12-month forward earnings per share consensus increased 8.5% over the past month. Kwon Min-kyu, researcher at Kiwoom Securities, explained that LG Innotek is a latecomer in the flip-chip ball grid array (FC-BGA) substrate market, which is experiencing the most severe supply shortage. Kwon stated, "Paradoxically, this positions the company for the steepest earnings growth and additional customer acquisition in the supply shortage environment, having previously suffered losses due to delayed investment."
FAQ
What did foreign investors do in Korean stocks on July 13?
Foreign investors net sold ₩1.8795 trillion on July 13, with 98.17% concentrated in semiconductor stocks including SK Hynix (₩1.447 trillion), Samsung Electronics (₩193.6 billion), and Samsung Electro-Mechanics (₩140.6 billion). However, they net bought non-semiconductor stocks with rising earnings consensus in sectors such as power equipment, IT hardware, and holding companies.
Why is LS Electric considered an oversold stock?
LS Electric's operating profit consensus for next year increased 10.6% from ₩833.8 billion to ₩933.8 billion over the past three months, while its stock price dropped 44.9% from the May peak. The company is positioned in the power equipment sector, identified as a core bottleneck in the artificial intelligence value chain with global market competitiveness.
How much foreign buying did LG Innotek receive this month?
LG Innotek received ₩645 billion in foreign net buying this month, including ₩164 billion on July 13. The company's 12-month forward earnings per share consensus rose 8.5% over the past month, driven by its position in the flip-chip ball grid array substrate market experiencing severe supply shortages.
