Don't Fight US Policy, Stocks Go in the Direction They're Pushed

Summary

The briefing discusses how high rates are pressuring consumer spending while AI infrastructure sectors like semiconductors, substrates, and especially Korean ESS/secondary batteries stay strong. It emphasizes not fighting US policy, with Korean ESS and shipbuilding as beneficiaries. The team also reviews HYBE and Korean entertainment; Choi Ho prefers SM on margin trends while Park Se-ik argues Korean entertainment is cheap on M&A value. Short-term views include a positive KOSPI triple-witching close and limited upside in the 10-year Treasury yield, with quality Korean names as fear-driven buying opportunities.

• High rates are damping consumer discretionary, but structural growth and turnaround sectors tied to AI infrastructure remain firm.
• Korean ESS/secondary batteries are seen as major AI data-center power beneficiaries, with US policy excluding China and strengthening the case.
• Korean shipbuilding is cited as a policy beneficiary from US Navy restoration and MRO work.
• Choi Ho reviews HYBE and SM: SM is preferred on margins, while HYBE's heavy investment has compressed margins but new artists are a longer-term option.
• Park Se-ik argues Korean entertainment companies, especially HYBE and SM, are cheap relative to global M&A value and have pricing power.
• Apple is used as a long-term consumer compounding example.
• Near-term: KOSPI has positive triple-witching seasonality; US 10-year yield upside is seen as limited with oil as key.
• Quality Korean names like Samsung Electronics and SK hynix are viewed as opportunities when fear-driven selloffs occur.