[E-Daily Reporter kyoungeun kim ] SamsungElectronics(005930)Despite the announcement of strong second-quarter earnings, the KOSPI plunged as profit-taking selling pressure surged; however, analysts suggest that given the solid fundamentals of the domestic stock market, increased volatility driven by supply and demand could present a buying opportunity.
Lee Kyung-min, an analyst at DaishinSecurities, stated in a report on the 8th, “Although concerns about a slowdown or weakening of fundamental momentum have been raised amid the sharp decline in the domestic stock market, the likelihood of this materializing is limited,” adding, “On the contrary, positive fundamentals—such as improved earnings, upward revisions to forecasts, and upward revisions to gross domestic product (GDP) growth rates—are becoming increasingly evident.” He emphasized, “In this environment, volatility driven by supply and demand presents an opportunity to increase exposure,” adding, “This is because the market remains driven by earnings and macroeconomic factors.”
Regarding the sharp decline in SamsungElectronics’ stock price despite strong earnings, he explained, “Despite the earnings surprise, the stock price plummeted due to perceptions that the positive news had run its course and the emergence of profit-taking selling,” adding, “Consequently, investor sentiment in the semiconductor sector weakened, leading to a broad market downturn.”
SamsungElectronics’ preliminary second-quarter results exceeded expectations, with revenue of 171 trillion won and operating profit of 89.4 trillion won, despite the recognition of a large provision for performance-based bonuses.
He went on to explain, “During the sharp reversal at the 7,300 KOSPI level last weekend, financial institutions injected 3.3 trillion won in buying pressure, and prior to that, foreign investors had poured in more than 5 trillion won through futures trading,” adding, “In particular, the 7,300 KOSPI level corresponds to a forward price-to-earnings ratio (PER) of 6.3x, which is close to the low point (6.27x) reached during the financial crisis.”
He continued, “Given that the market is severely undervalued, we believe there is significant upside potential simply through valuation normalization, and downside risk is limited.”
Furthermore, he projected, “If the inflow of funds from financial investments driven by exchange-traded fund (ETF) trading continues, it is expected to support the index’s bottom while driving the existing upward trend.”