Surging Defense and Shipbuilding Stocks: Buy or Sell? Japan's Rate Hike, Is Korea Next: Impact on the Market? | Director Lee Ju-yeon

Summary

Director Lee Ju-yeon analyzes the impact of Japan's rate hike and a potential Bank of Korea rate increase before the Fed. He presents a clear semiconductor leadership thesis, highlights sector selection around the rate-hike cycle, and provides specific stock picks in financials, defense, power equipment, secondary batteries, autos, shipbuilding, internet, and pharma/bio, while making a bullish call on KOSDAQ in July and identifying Alteogen as the key biotech leader. He also warns about a possible deceleration in semiconductor earnings momentum in Q3 leading to a slower market ascent.

• Global interest rate dynamics: BOJ hike and Korea may hike before the US, with a 25bp move likely in July.
• Historical analysis shows semiconductors are unaffected by rate moves, while financials and defense/space perform well before hikes, and cyclicals rebound after.
• Semiconductors remain the core leadership, driven purely by earnings and EPS growth.
• Specific picks: LS Electric (power equipment), LG Energy Solution / Samsung SDI / L&F (secondary batteries), Hyundai Motor / Kia / Hyundai Mobis (autos), HD Hyundai Heavy Industries (shipbuilding), NAVER (internet).
• KOSDAQ expected to strengthen in July on policy support and a credit balance bottom; Alteogen seen as the critical leader for a pharma/bio rebound.
• Large-cap biopharma Samsung Biologics and Celltrion have strong earnings and may attract flows when sentiment improves.
• Semiconductor equipment and materials (소부장) are worry-free and will maintain momentum in H2.
• Caution: semiconductor EPS growth may decelerate in Q3, suggesting a speed adjustment for the KOSPI rather than a sharp downturn, and defense/shipbuilding should not be chased after surges.