As Korea's stock market repeatedly rises and falls without a clear direction, the gap between price targets set by brokerages and actual share prices has widened further. With funds concentrating on policy beneficiary stocks such as artificial intelligence (AI) chips and holding companies, sectors like biotech and secondary batteries are failing to keep pace with market expectations.
According to FnGuide on Monday, as of last Thursday, 231 of 233 KOSPI stocks (99.1%) that received price targets from three or more brokerages over the past three months were trading below their price targets. The number of stocks with a divergence rate exceeding 50% relative to price targets reached 136. Only two KOSPI-listed companies recorded a negative divergence rate: LG Electronics (-8.9%) and SK Networks (-2.2%). This means the group of stocks that still fall short of brokerage expectations is far thicker than the "overheated stocks" that have already exceeded their price targets.
A representative sidelined sector is biotech. Yuhan Corporation, one of Korea's five major pharmaceutical companies, recorded a divergence rate of 88.2% relative to its price target. SK Biopharmaceuticals (71.3%) and Hanmi Pharmaceutical (54.0%) also traded more than 50% below their price targets, while large-cap stocks by market capitalization such as Celltrion (48.6%) and Samsung Biologics (46.2%) also showed divergence rates exceeding 40%. Traditional pharmaceutical stocks including Daewon Pharmaceutical (94.1%), Dong-A Socio Holdings (90.8%), GC Biopharma (73.0%), Daewoong Pharmaceutical (67.1%), and Chong Kun Dang (57.7%) showed even wider gaps with brokerage expectations.
The market assesses that while the biotech sector's fundamentals, including technology exports and new drug development, remain valid, the concentration of investor interest on AI chips and policy beneficiary sectors has had a significant impact. Huh Hye-min, a researcher at Kiwoom Securities, noted, "In the first half, the pharmaceutical and biotech sector experienced extreme neglect in terms of supply and demand, and posted the weakest returns among major countries' Morgan Stanley Capital International (MSCI) healthcare indices." She added, "For a trend-based rebound, the concentration must ease along with proof of global competitiveness."
The situation was similar for the secondary battery sector. L&F, a secondary battery cathode material manufacturer, recorded a divergence rate of 135.5% relative to its price target, the highest among the large-cap stocks surveyed. POSCO Holdings (81.3%), Samsung SDI (76.0%), POSCO Future M (69.1%), LG Chem (62.7%), LG Energy Solution (62.5%), and SK IE Technology (60.1%) also traded far below their price targets.
Over the past month, Korea's leading secondary battery companies experienced significant corrections, but global electric vehicle (EV) sales and battery shipments showed strong performance. The EV chasm (a temporary demand slowdown) that has weighed on investor sentiment is also entering an easing phase, according to some analyses, and the assessment is that expectations for earnings improvement at major companies have not yet been sufficiently reflected in share prices.
Jang Jung-hoon, a researcher at Samsung Securities, explained, "During the month of June, the return on Korea's secondary battery stocks was -19%, continuing an 'underperform' situation compared with Chinese companies (-4%)." He added, "It is advisable to respond focusing on energy storage system (ESS)-related stocks, where positive industry conditions such as customer order events and capacity expansion are expected in the second half, or on companies operating in the semiconductor materials space."
