September Correction is a 'Bottom to Buy'...Reasons for Delayed Foreigner Return and 'Empty House' Strategy | Myeong Min-jun, Lee Hyeok-jin, NH Investment & Securities Stock Strategy Team Leader

Summary

The speaker analyzes the current Korean stock market, suggesting that the September correction is a buying opportunity despite short-term volatility. He advises shifting focus from large-cap memory semiconductors to a stock-picking strategy for the rest of the year due to retail tax-selling pressures. Key investment themes include 'empty house' stocks with depleted foreign ownership, semiconductor equipment suppliers benefiting from new capex cycles, and sectors showing valuation disconnects compared to their peers.

• The September market correction presents a buying opportunity based on historical mid-term election cycle patterns.
• Large-cap memory semiconductors may face short-term pressure due to retail investors' capital gains tax avoidance.
• KOSPI excluding semiconductors has seen its P/E drop to 10x, indicating an attractive valuation bottom for other sectors.
• Foreign investors are expected to return to the Korean market once the VKOSPI (volatility index) drops below 30.
• Semiconductor equipment stocks are favored as memory makers begin a long-term capital expenditure cycle.
• Bio/healthcare is highlighted as a market hedge with upcoming mRNA pipeline catalysts.
• 'Empty house' strategies target stocks with depleted foreign ownership or low market expectations, such as PharmaResearch.
• Valuation disconnects in peers (e.g., traditional cosmetics, spandex makers, and supply chain partners) offer strong stock-picking opportunities.