Oh Gwa-jang

In a weak index environment, the market's current leaders are found among Korean companies with PEG below 1 and visible earnings growth. Preferred names include Isu Petasys at about 0.8, APR at about 0.8, Cosmax at about 0.9, Hyosung Heavy Industries, and Samsung Electro-Mechanics; they have met or beaten consensus and have relatively higher earnings visibility. This leadership is unlikely to change in the second half, so upside should remain concentrated in these low-PEG earnings leaders.

In a weak index environment, the market's current leaders are found among Korean companies with PEG below 1 and visible earnings growth. Preferred names include Isu Petasys at about 0.8, APR at about 0.8, Cosmax at about 0.9, Hyosung Heavy Industries, and Samsung Electro-Mechanics; they have met or beaten consensus and have relatively higher earnings visibility. This leadership is unlikely to change in the second half, so upside should remain concentrated in these low-PEG earnings leaders.

Samsung Electronics’ Q2 conference call was described as the best in recent memory. The company revealed that DRAM and NAND ASPs rose far more than expected, and it guided for further bit growth in Q3. Critically, management said the memory supply shortage will persist through 2028—and possibly into 2029—with long-term supply agreements already covering up to 70% of capacity. On the shareholder-return front, Samsung strongly hinted at a special dividend/buyback at the end of its three-year policy period, stating it will ‘repay shareholders with good results soon.’ Consensus earnings estimates continue to be raised, and the stock is viewed as attractively priced after the recent max drawdown.

Samsung Electro-Mechanics reported strong Q2 results, beating even raised consensus on revenue and operating profit, driven by a mix shift toward high-end MLCCs for servers and automotive. Analyst estimates for the MLCC business have been aggressively upgraded, with revenue now seen at KRW 9.1T in 2026 (up from KRW 7.3T). By modeling a 50% MLCC price increase from current levels (to KRW 7.5 per unit) and a 95% utilization rate, and adding the package-substrate business, the sum-of-parts suggests a market cap of KRW 100–110T versus the current KRW 65T, implying 50–70% upside. The stock sold off 14% on the day of the good results due to ETF deleveraging, creating a significant valuation disconnect.

BYD's Q1 sales and profits fell, but June sales recovered to 400,000 units (+5.5% YoY), with exports hitting a record 180,000 units. The overseas business enjoys much higher margins (GP margin 27% vs. 18.6% domestic, vehicle margin ¥20,000 vs. ¥5,800) because competition is fiercer in China while BYD dominates Chinese EV exports abroad. Dongbang Securities maintains a BUY rating with a target of ¥125, implying 30% upside from the current ¥94.8. The seasonal upswing and new model launches are expected to sustain the recovery into H2, making the stock attractively valued at PER 18.3x with ROE near 17%.

TCK is a semiconductor parts company that has corrected about 40% from its highs, making valuation attractive. A Korea Investment & Securities report maintains a buy rating and target of 400,000 won. The upcoming ramp in DRAM (and later NAND) capex will drive demand for its SIC rings used in deposition equipment, and the expiration of a marketing fee agreement with KC will improve operating margins by 2pp from 2027. The company is seen as a stable earnings compounder with a visible catalyst.