SK hynix jumps 11% on Anthropic IPO optimism, AI concerns weigh on market… [Kim Geun-hee's Market Wrap-up]

Driven by Anthropic's push for an initial public offering (IPO) and SK hynix's expanded shareholder returns, SK hynix rose 11.04% and SK Square climbed 15.74% during the final week of October (the 26th–30). However, concerns over the sustainability of AI investment resurfaced following earnings reports from major U.S. tech companies, suggesting that volatility in semiconductor stocks is likely to persist for the time being.

According to Korea Exchange data on the 31st, the KOSPI closed at 5,730.74 this week, up 180.44 points (3.25%) from Jeonju (5,550.30). On the 26th (local time), news that Anthropic was pursuing an IPO eased concerns about AI profitability. Additionally, semiconductor stocks surged after SK hynix announced third-quarter results exceeding market expectations and plans to expand shareholder returns on the 28th. However, doubts about the sustainability and profitability of AI investment grew again following consecutive earnings releases from Alphabet, Intel, and Amazon, causing semiconductor stocks to plunge sharply on the 30th.

As a result, SK hynix and Samsung Electronics posted gains of only 11.04% and 4.41%, respectively, from the 26th to the 30th. In the case of Samsung Electronics, the rise was smaller than that of SK hynix because the expected shareholder return policy was not announced. Since SK hynix announced an expansion of shareholder returns, SK Square, which holds shares in the company, also jumped 15.74%.

Nevertheless, with concerns over AI profitability rising again, volatility in semiconductor stocks appears unavoidable. Researcher Cho A-in at Samsung Securities stated, "We expect domestic stock markets to remain highly volatile for the time being, driven by changes in the earnings and outlooks of AI companies, macroeconomic conditions, and supply and demand dynamics." She added, "In particular, whether the correction on the 30th will be limited to a temporary dip in investor sentiment or lead to downward revisions in profit forecasts for AI-related companies will be a key variable determining the future direction of the market."

Beyond semiconductors, stocks that posted third-quarter results exceeding expectations also saw significant gains. Among KOSPI-listed stocks (with a market capitalization of over 1 trillion won and weekly trading volume of over 100 billion won), Hanwha Vision was the top gainer, rising 32.56%.

Hanwha Vision's third-quarter operating profit increased by 183.3% year-on-year to 102.6 billion won, significantly exceeding market consensus estimates. A tariff refund of approximately 20 billion won related to exports to the U.S. subject to tariffs last year was reflected in the results. In addition, sales grew due to increased demand for AI-based cameras and other products.

Samsung SDI also rose 10.7%. The company's third-quarter operating profit reached 407.8 billion won, surpassing market expectations (191.3 billion won) by 113%. Sales of energy storage systems (ESS) increased due to the growth of AI data centers. One-time factors, such as compensation from customers, were also reflected. Consequently, Samsung Securities, Korea Investment & Securities, Eugene Investment & Securities, Shinhan Investment Corp, Daishin Securities, and Daol Investment Securities raised their target prices for Samsung SDI.

Hanmi Pharmaceutical, which licensed its next-generation Fabry disease treatment candidate "LA-GLA" to GC Green Cross in a deal worth up to 634.7 billion won, also rose 14.8% during the period.

In contrast, Daewoo E&C and Doosan Enerbility fell after negotiations broke down over subcontracting contracts for main equipment construction on a new nuclear power plant project in the Czech Republic. Daewoo E&C plunged 25.71% during the period, while Doosan Enerbility dropped 7.74%.

Market analysts noted that Daewoo E&C, which had previously benefited from nuclear-related projects, would likely suffer a greater blow. Researcher Kim Gi-ryong at Mirae Asset Securities analyzed, "We are lowering our target price for Daewoo E&C from 20,000 won to 9,900 won and adjusting our investment rating from Buy to Sell." He added, "The most important basis for justifying the sharp stock price surge this year and elevated multiple levels has become uncertain."

Stocks that recorded earnings shocks in the third quarter topped the list of decliners. Hanwha Solutions (-20.56%), HD Hyundai Marine Solution (-16.39%), OCI Holdings (-14.17%), and LG Innotek (-13.98%) all posted results below expectations for the third quarter.

In particular, LG Innotek's third-quarter operating profit came in at 94.8 billion won, falling well short of market expectations (300 billion won). The decline in the won-dollar exchange rate is cited as the main cause. Hyundai Motor Securities, Samsung Securities, SK Securities, iM Securities, Daol Investment Securities, Shinhan Investment Corp, Korea Investment & Securities, Kiwoom Securities, and IBK Investment & Securities lowered their target prices for LG Innotek.