Samsung Electronics (005930.KS) tumbled nearly 9% despite unveiling its largest-ever shareholder return plan, dragging down Samsung Group stocks broadly. The fallout sent the KOSPI down more than 3%, while POSCO Group stocks rallied across the board on recovering investor sentiment toward the battery sector.
Samsung Electronics closed the previous session at 257,000 won, down 24,500 won, or 8.69%, from the prior close, the Korea Exchange (KRX) said on the 25th. During the session, the stock extended its losses to as low as 255,000 won. Samsung Life Insurance (032830.KS), down 13.09%, and Samsung C&T, down 7.84% — both seen as beneficiaries of the large payout given their stakes in Samsung Electronics — also fell sharply.
The declines are attributed to profit-taking and assessments that the plan fell short of the market's heightened expectations, even though Samsung Electronics on the 21st of this month announced a shareholder return plan worth 90 trillion to 110 trillion won. Samsung Electronics was also the most heavily net-sold stock by foreign and institutional investors that day, with foreigners and institutions dumping 1.81 trillion won ($1.3 billion) and 1.63 trillion won ($1.2 billion) worth of shares, respectively.
Exchange-traded funds (ETFs) that bundle Samsung Group stocks all fell as well. KODEX Samsung Group dropped 4.10%, TIGER Samsung Group fell 3.83%, and KODEX Samsung Group Value declined 3.55%. These products all hold more than 20% in Samsung Electronics and also spread their investments across major affiliates such as Samsung Electro-Mechanics, Samsung C&T, Samsung SDI and Samsung Life Insurance.
POSCO Group stocks, by contrast, rose in unison, presenting a sharp divergence. POSCO Future M jumped 10.33% to 170,900 won, while POSCO International (up 5.93%), POSCO Holdings (005490.KS, up 5.65%), POSCO DX (up 5.59%), POSCO M-Tech (up 6.43%) and POSCO Steeleon (up 2.68%) all closed higher. The ACE POSCO Group Focus ETF, the only fund in Korea concentrated on POSCO Group stocks, also gained 5.94%.
The strength in POSCO Group stocks is attributed to buying that spread that day centered on battery names. Samsung SDI secured about 4.45 trillion won ($3.2 billion) in investment funds by selling its stake in Samsung Display, raising expectations for an expansion of its North American energy storage system (ESS) business, and related stocks including L&F (up 16.36%) and LG Energy Solution (373220.KS, up 5.39%) also rose. POSCO Future M likewise posted a double-digit gain as it benefited from this recovery in sector sentiment.
Analysts say that as energy storage systems (ESS) emerge as a new growth driver for a battery sector that had struggled amid slowing electric-vehicle demand, the benefits could spread even to related materials makers. Kim Hyun-soo, an analyst at Hana Securities, noted that POSCO Future M's announcement of an LFP cathode order, even amid a weak EV battery market, is an example signaling a surge in ESS demand. He added that he expects related orders to increase rapidly through the rest of the year.
