Lee Jae-chan

LS Electric is the market leader in power distribution panels with unique smart grid capabilities; its recent contract from Blue Energy provides a strong reference and validation, making it the market's favorite transformer play despite its already premium valuation.

Hyundai Electric benefits from the global transformer shortage and AI-driven electricity demand; its notoriously conservative guidance was just raised dramatically from $4.2B to $6.1B, and historical similar upgrades led to a strong stock re-rating and vertical rally, making it a timely long.

The next major AI supply-chain bottleneck is data center construction and skilled labor. In the US, Sterling Infrastructure is uniquely positioned because it is the only company that has successfully internalized its construction workforce, while 40% of the construction labor pool is expected to retire by 2031. Its data center contracts are structured so that hyperscalers buy materials directly, and savings from accelerated schedules or reduced material use are split 70-30 with the builder, creating powerful profit momentum. This gives Sterling an exceptional edge as the data center buildout accelerates.

Samsung Electronics and SK hynix are drastically undervalued compared to TSMC (Samsung P/E 5.2x, SK hynix ~6x vs. TSMC 30x), while earnings momentum is exceptionally strong and Samsung's foundry has just turned profitable with yield improvements, warranting a significant re-rating even if they only receive a fraction of TSMC's multiple.

Samsung Electronics and SK hynix are drastically undervalued compared to TSMC (Samsung P/E 5.2x, SK hynix ~6x vs. TSMC 30x), while earnings momentum is exceptionally strong and Samsung's foundry has just turned profitable with yield improvements, warranting a significant re-rating even if they only receive a fraction of TSMC's multiple.

Hyosung Heavy Industries trades at an attractive 15x forward P/E on 2028 earnings, excels in ultra-high voltage transformers that can carry five times more power, and is securing long-term agreements during the transformer shortage, offering a cheap entry point into the structural power equipment theme.

Pharmaresearch has a strong brand (Rejuran) but faced multiple compression due to competition from L&C Bio's new product. Improvement in its cosmetics division margins should drive a rebound in the stock.

AI capex is not declining, AI monetization has not failed, and the market is still mid-cycle despite oil and rate headwinds. Investors should focus on AI infrastructure including DRAM, nuclear power, and solar power.