August 5 Closing Market Review: Rebound Occurs but Trend Reversal Not Yet... Protect Cash and Buy in Installments as Foreign Supply-Demand Remains Unstable

Summary

On August 5, the KOSPI and KOSDAQ both rebounded, but the recovery lacked strong volume and was restrained by negative foreign futures positions and geopolitical risks. Lee Kwon-hee and Jang Woojin advised holding cash and pursuing cautious installment buying, while highlighting specific opportunities in memory chips, power equipment, Samsung Electro-Mechanics, LG Innotek, Alteogen, HD Hyundai Construction Equipment, and OE Solution, and flagged risks in Daehan Optical Telecom. Shipbuilding stocks and HBF-related equipment were mentioned as themes to monitor for upcoming catalysts.

• KOSPI and KOSDAQ posted gains but volume was light; rebound is fragile and not a confirmed trend reversal.
• Foreign investors bought 2 trillion won in KOSPI cash but hold large short futures positions, capping upside.
• Memory chip stocks Samsung Electronics and SK Hynix are seen as undervalued with ~30% upside on P/B 1.5x and tight DRAM supply through 2028.
• Power equipment (Hyosung Heavy, LS Electric, Sanil Electric) viewed as a no-brainer buy due to global power demand and grid replacement.
• Samsung Electro-Mechanics and LG Innotek rallied on strong earnings and AI/robotaxi camera module demand; LG Innotek seen as having more room.
• Alteogen landed a massive contract and royalties from Keytruda SC are accelerating, improving cash flow visibility.
• Daehan Optical Telecom is an avoid despite the optical rally; OE Solution is a potential beneficiary of US-China optical transceiver ban.
• Shipbuilding and HBF standard are developing catalysts to watch, not yet actionable long positions.