Korea's Top 1% Traders Snap Up SK hynix, Dump Samsung Electronics

The stocks most heavily bought by high-return investors trading through Mirae Asset Securities on the morning of the 19th were SK hynix (000660.KS), Hankook Kolmar, Korea Electric Power (KEPCO) and Alteogen, in that order. The top net-sold stocks were TLB and Samsung Electronics (005930.KS), showing a pattern of buying SK hynix while selling Samsung Electronics.

According to Mirae Asset Securities, the stock most heavily bought as of 11 a.m. by so-called "top traders" — clients whose one-month returns ranked in the top 1% — was SK hynix.

According to the Korea Exchange, SK hynix was trading at 1.53 million won around 11 a.m., down 126,000 won, or 7.58%, from the previous session. Middle East tensions and a spike in government bond yields weighed on investor sentiment, while delays in OpenAI's push to improve profitability further dampened sentiment toward chip stocks.

The top traders' aggressive buying of SK hynix is attributed to expectations for shareholder returns. SK hynix is estimated to have shareholder-return capacity of about 90 trillion to 100 trillion won. Eugene Investment & Securities projected that SK hynix's net cash would grow to around 200 trillion won by the end of this year, giving it capacity for shareholder returns of up to 100 trillion won. The brokerage also raised the possibility of an initial special shareholder-return announcement in the third quarter.

Samsung Electronics, the second-most net-sold stock, was trading at 250,000 won, down 18,500 won, or 6.89%, from the previous session. The market expects Samsung Electronics to also pursue shareholder returns of more than 100 trillion won. Samsung Electronics is expected to unveil its next three-year shareholder-return policy as early as this month, with the scale projected to reach up to 120 trillion won.

Despite both Samsung Electronics and SK hynix preparing shareholder returns exceeding 100 trillion won, the difference in buying interest is attributed to SK hynix's steeper decline from its peak. Samsung Electronics' record high was 370,000 won and SK hynix's was 2,987,000 won. Samsung Electronics' share price has fallen about 20%, while SK hynix's has effectively been cut in half. This is seen as leading investors to view SK hynix as having greater upside potential and to buy it aggressively.

Hankook Kolmar ranked second in net buying. Beauty stocks have been strong in the market, driven by improving earnings as well as the easing of overhang concerns from early investors, raising the prospect that they could emerge as leading stocks in the second half. The dominant analysis holds that Hankook Kolmar's growth, centered on sun care and basic care, will continue and that its U.S. unit's earnings will normalize. Analysts also cited expected stable profit contributions from subsidiary HK inno.N and set a target price of 150,000 won.

Cho Kyung-jin, an analyst at IBK Investment & Securities, said Hankook Kolmar is an original development and manufacturing (ODM) company with strengths in producing high-margin sun care and basic care products. "Driven by strong exports in the sun care and basic categories at the domestic unit and diversification of production categories, we expect top-line growth and expanding operating leverage," Cho said.

KEPCO came in third. Brokerages have been lowering their target prices for KEPCO. Eight of the 10 brokerages that issued analysis reports cut their targets, including KB Securities (54,000 won to 48,000 won), iM Securities (53,000 won to 48,000 won), Samsung Securities (63,000 won to 52,000 won) and NH Investment & Securities (63,000 won to 55,000 won).

Still, buying appears to have flowed in amid the share-price decline on expectations for the government's mega-projects. Chung Hye-jung, an analyst at KB Securities, said that a contraction in second-half operating profit from a year earlier would be unavoidable due to a delayed reflection of rising liquefied natural gas (LNG) prices from the third quarter. "Given the government's mega-projects, large-scale investment in generation facilities and the power grid is needed, so dividend capacity will also be limited," Chung said.

Mirae Asset Securities compiles the trades of investors whose returns ranked in the top 1% over the past month and discloses them on its mobile trading system (MTS) on a real-time, previous-day and five-day basis. The statistics are simple informational guidance unrelated to Mirae Asset Securities' views and do not guarantee any individual investor's performance or returns. Theme stocks carry the risk of abnormal price swings, so caution is advised in investing.