"My Portfolio Was Deep in the Red, I Didn't Even Want to Look" Companies That Shone Amid October's Market Plunge

Hanwha M&S surges 32% in October on major shareholder's tender offer
Yuhan Corporation, HYBE, S1 and others also post share price gains
LIG Defense & Aerospace Services, SK Square and Hyosung Heavy Industries plunge

Despite the KOSPI plunging 17% in October, some companies saw their share prices surge. Even as investor sentiment across the market has frozen, companies' efforts to support their share prices and expectations of improved earnings appear to be driving divergent performance among individual stocks.

Hanwha M&S Surges 32% in October on Majority Shareholder's Tender Offer

According to the Korea Exchange on October 22, the KOSPI had plunged about 17% through October 21. After tumbling 22.1% in July, it rebounded slightly in August (3.4%) and September (0.2%), but has resumed its decline for the first time in three months. The KOSPI, which briefly reached the 9,300 level intraday in June, has since fallen to around 5,700 amid persistent concerns over high inflation, high interest rates and a peak-out in semiconductors.

In particular, concerns over the profitability of artificial intelligence (AI) investment, led by the United States, came to the fore in October, accelerating declines in memory semiconductor companies such as Samsung Electronics and SK hynix. SK hynix has plunged 28% this month alone, while Samsung Electronics has fallen 18%.

Even as the market sell-off continues, performance has diverged among individual stocks, with some companies surging more than 30%. Among KOSPI 200 constituents, the company with the highest return so far this month is Hanwha Machinery & Services Holdings (Hanwha M&S). Hanwha M&S, a holding company overseeing the Hanwha Group's hotels, food and beverage businesses, and robotics operations, has surged 32.1% this month alone.

The company's share price soared after Kim Dong-seon, president in charge of future strategy, announced on October 12 that he would make a tender offer for about 19% of its common shares at 8,000 won per share. Before news of the tender offer became public, the share price stood at 6,110 won; it subsequently climbed to 7,820 won. Kim plans to acquire 16.06 million shares, or about 19% of Hanwha M&S's total common shares, through a tender offer ending on November 2. He plans to use the offer to strengthen his control of the company and expand responsible management.

The company with the second-highest gain is Yuhan Corporation, whose share price has risen 18.1% this month. The gain is attributed to a combination of solid third-quarter earnings and expectations for its lung cancer treatment Leclaza (lazertinib). "Yuhan Corporation is expected to post third-quarter operating profit of 34.3 billion won, in line with consensus estimates," said Lee Dal-mi, an analyst at Sangsangin Securities. "Leclaza's high efficacy and expectations for additional technology exports will drive up the share price."

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HYBE, an entertainment company, ranked third, rising 16.8% this month. Expectations for solid earnings led by BTS, the strong performance of new groups such as KATSEYE, and bargain hunting after the share price's steep decline are seen as having fueled the rebound. S1 Corporation ranked fourth, gaining 16.3%. Its share price rose after the company announced on October 15 a plan to acquire and cancel KRW 450 billion worth of treasury shares. LG Energy Solution ranked fifth, rising 13.8% on expectations of an improvement in the rechargeable battery industry.

LIG Defense & Aerospace, SK Square, and Hyosung Heavy Industries Plunge on Peak-Out Concerns

Although some stocks performed well, the broader market trend was weak. Of the KOSPI 200 constituents, only 48 had gained this month, while the remaining 152 had fallen.

The biggest decliner was LIG Defense & Aerospace Service, which plunged 35.4% this month alone. Concerns over profitability arose amid a fall in the won-dollar exchange rate, while increased development costs also weighed on the share price. "Third-quarter operating profit is expected to come in at 90 billion won, about 15.1% below consensus estimates," said Paek Ju-ho, an analyst at Hyundai Motor Securities. "Development costs are rising more than expected, which will affect profitability."

SK Square, an intermediate holding company of the SK Group, followed with a 32.8% decline. Its share price fell in tandem with that of its key subsidiary, SK hynix, which weakened amid concerns that the memory semiconductor industry had peaked. Hyosung Heavy Industries, a power equipment company, ranked third with a 32.3% drop. Concerns about damage to profitability, as data center construction delays continue in the United States, are seen as weighing on its share price.

This content was produced with the assistance of AI translation services.