▲ AI PRISM* Personalized Economic Briefing
* Editor's note: AI PRISM (Personalized Report & Insight Summarizing Media) is an AI-based personalized news recommendation and summary service developed with support from the Korea Press Foundation. It selects and provides six tailored news items by reader type.
[Key Issue Briefing]
■ KOSPI Reclaims 7,000 as Foreign Investors Return: Foreign investors bought a net 8.0698 trillion won ($5.9 billion) worth of stocks this week over four consecutive trading days, and the KOSPI touched 7,010 points intraday. The weekly gain topped 11%, quickly recovering last week's drop of more than 5%, while U.S. producer prices came in below market expectations, easing inflation concerns.
■ Chey Tae-won: "Next Year Will Be the Toughest," as Chipflation Takes Hold: SK Group Chairman Chey Tae-won warned that the global memory market will fall into its worst-ever supply-demand imbalance next year, and foreshadowed "chipflation," in which surging memory prices feed through to higher prices for IT products such as Apple devices. SK hynix (000660.KS) is reviewing the construction of a front-end fabrication plant in the United States while expanding long-term supply agreements centered on custom HBM, laying out a strategy to shield itself against a downturn in the industry cycle.
■ LS Group Operating Profit Tops 1 Trillion Won as Power Infrastructure Supercycle Materializes: LS Group posted first-half operating profit of 1.0717 trillion won, surpassing 1 trillion won for a half-year period for the first time and already exceeding its full-year operating profit from the previous year. Surging demand for cables, transformers and copper driven by the spread of AI data centers lifted earnings, and its order backlog swelled to 19.5554 trillion won.
[Stocks in Focus]
1. Foreign Investors Return, Buying for 4 Straight Days and Touching 7,000 Intraday
Summary: Foreign investors net bought 3.0483 trillion won on the 14th, extending their buying advantage to four consecutive trading days from the 11th, and the KOSPI closed at 6,977.94, up 164.60 points (2.42%) from the previous session. Foreigners, who net sold 7.1 trillion won last week, bought a total of 8.0698 trillion won this week, marking a complete shift in the flow of funds. Samsung Electronics (005930.KS) (up 2.43%) and SK hynix (up 3.26%) rose for a fourth straight day, followed by Hyundai Motor, which jumped 8.24%, while U.S. producer prices rose just 4.7% year-on-year in July, below market expectations and reviving appetite for risk assets. With minutes from next week's FOMC meeting emerging as a key event for gauging the direction of interest rates, analysts say it is worth watching short-term fund flows centered on foreign investor favorites such as chipmakers and Hyundai Motor Group.
2. Chey Tae-won: "Reviewing U.S. Front-End Fab...Worst Supply-Demand Imbalance Next Year"
Summary: SK Group Chairman Chey Tae-won, in an interview with U.S. broadcaster CNBC, officially confirmed for the first time SK hynix's intention to build a front-end fabrication plant in the United States, saying it was very difficult to find a suitable site. SK hynix, which is currently building a $3.87 billion packaging plant in Indiana, plans to move into a custom HBM system starting with HBM5 (the eighth generation) and expand long-term agreements (LTAs) alongside its review of front-end investment. Chey assessed that demand is surging while all memory companies have failed to adequately prepare for capacity expansion, making next year a war-like year, and also warned of chipflation, in which surging memory prices lead to higher prices for finished products such as Apple devices. A forecast that total memory output will expand to about five times current levels within the next 10 years points to a prolonged shortage of HBM and DRAM supply, and is seen as grounds for a re-rating of SK hynix's medium- to long-term valuation.
3. Riding the "Power Megacycle," LS Sets Record First-Half Operating Profit of 1 Trillion Won
Summary: LS Group posted consolidated first-half operating profit of 1.0717 trillion won, up 98.4% from a year earlier, surpassing its full-year operating profit from last year (1.0526 trillion won) in just half a year. LS Cable & System expanded supplies of ultra-high-voltage submarine cables and busducts in North America and Europe to post operating profit of 238.4 billion won, while LS Electric earned 305.1 billion won on demand for ultra-high-voltage transformers for data centers. LS MnM recorded operating profit of 365.3 billion won, up 427% from a year earlier on rising prices for copper and precious metals, and the combined order backlog of major affiliates swelled to 19.5554 trillion won, improving earnings visibility going forward. With the power supercycle continuing to benefit the group as AI data center expansion coincides with demand to replace aging power grids in North America and Europe, observers suggest that earnings momentum at LS Group affiliates will be sustained in the second half.
4. Dividends Shine in a Volatile Market...More Than 5 Trillion Won to Be Paid Out in August
Summary: Seventy KOSPI- and KOSDAQ-listed companies that have set August interim or quarterly dividend record dates will pay out a combined 5.4224 trillion won, with Hyundai Motor (654.6 billion won), SK hynix (273.3 billion won) and KT&G (207.6 billion won) at the top. A revision to the Capital Markets Act last year made it possible to fix quarterly dividend amounts before the record date, making it easier for investors to check their expected payout and decide whether to buy. By disclosed dividend yield, the order was Webzen (5.0%), HS Ad (4.5%) and POSCO International (2.9%), while Korea Zinc had the highest dividend per share at 5,000 won. Investors must buy at least two business days before the dividend record date to receive the dividend, and because the price adjustment after the ex-dividend date can exceed the dividend amount, advisers recommend also checking dividend history and the sustainability of shareholder return policies.
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