Samsung Electronics, SK Hynix Credit Balances Surge... Semiconductor Sentiment Recovers

Funds from 'debt investment' (buying stocks on margin) are flowing back into Samsung Electronics and SK Hynix, the core of semiconductor investment. As of the 14th, the credit balances of both companies increased by 9.4% for Samsung Electronics and 20.9% for SK Hynix compared to the end of last month. Behind the increase in balances lies a rebound in stock prices. Both stocks continued a winning streak for four consecutive trading days starting on the 11th, closing on the 14th at 274,500 won for Samsung Electronics and 1.645 million won for SK Hynix.

Samsung Electronics' credit balance has fluctuated significantly this year. The balance, which stood at 1.7197 trillion won at the beginning of the year, surged to 5.5353 trillion won on the 9th of last month riding the bull market led by AI semiconductors, but shrank to 4.2466 trillion won on the 3rd as the semiconductor sector correction prolonged. However, it recovered to the 5 trillion won range again on the 12th at 5.0685 trillion won, and was tallied at 4.8821 trillion won on the 14th.

SK Hynix followed a similar trajectory. The credit balance, which was 981.8 billion won on January 2, surged more than fivefold to 5.4624 trillion won on July 14. Although it dropped to 3.9803 trillion won on the 4th during the correction phase, it regained the 5 trillion won range this month as it recaptured its upward momentum.

Along with the balance expansion of the top two stocks by market cap, the credit balance for the entire market also increased. According to comprehensive statistics from the Financial Investment Association, the credit balance increased for seven consecutive trading days from 27.4439 trillion won on the 3rd to reach 30.9263 trillion won on the 13th.

Voices in the securities industry expect a full-fledged re-rating in the third quarter after passing the bottom. Kim Dong-won, a researcher at KB Securities, said, "Samsung Electronics and SK Hynix are trading at 12-month forward P/E ratios of 4.5x and 3.7x, respectively, due to concerns over U.S. rate hikes, the sustainability of AI investments, the Iran situation, and semiconductor 'peak-out' (post-peak decline)." He added, "It is judged that we have now entered a phase where these four concerns are fading, raising expectations for a full-fledged re-rating starting in the third quarter."

NH Investment & Securities researcher Na Jeong-hwan diagnosed that "semiconductor stock prices rebounded on the back of expectations for shareholder returns from memory companies and strong earnings from AI infrastructure firms." He pointed out, "Results and guidance from AI infrastructure firms that exceeded market expectations, along with news of Singapore's sovereign fund Temasek investing in domestic semiconductor stocks, are also positive for investment sentiment."