SEOUL — Samsung Electronics Co. (KRX:005930) announced on Tuesday that it expects second-quarter sales of approximately 171 trillion won and operating profit of 89.4 trillion won, setting new records. Despite the strong guidance, the company's shares closed down 6.9%, and the broader KOSPI index fell 4.9% to 7,656.31, after sliding as much as 8.2% earlier in the session.
Market-Wide Selloff
The KOSPI saw its sixth circuit-breaker halt this year as foreign investors sold a net 2.9 trillion won in Korean stocks. Retail buyers stepped in to pick up 3.2 trillion won, and retail margin debt stood at 29.7 trillion won as of Friday, just 0.3% below its late-June peak. SK Hynix Inc. (KRX:000660) also fell 6.1%, adding to the pressure on the chip sector.
Earnings vs. Price Disconnect
Analysts noted that the market had already priced in the strong earnings. Samsung's operating profit surged 56% from the first quarter and was nearly 19 times the year-ago figure of 4.68 trillion won. Sales rose from 133.87 trillion won in Q1 and 74.57 trillion won a year earlier. However, Mirae Asset Securities analyst Seo Sang-young called the numbers “good news” but said market expectations had become too high. Kiwoom Securities’s Han Ji-young attributed the volatility to profit-taking, while Morningstar analyst Jing Jie Yu pointed to a “slight revenue miss” as DRAM price increases fell short of expectations.
SK Hynix ADR Launch
Adding to the market dynamics, SK Hynix is pitching a 43 trillion won American depositary receipt (ADR) offering on Nasdaq, with pricing expected Thursday and a debut on Friday. The offering consists of 17.79 million new shares at 10 ADRs per common share. Thornburg Investment Management portfolio manager Di Zhou described the current environment as a “memory super cycle,” while Roundhill Investments CEO Dave Mazza called the U.S. listing an “accessibility discount” event. Standard Chartered’s equity CIO Sundeep Gantori sees the memory cycle in a “mid-cycle stage.”
Broader Market Impact
Other major Korean names also fell. LG Energy Solution Ltd. (KRX:373220) dropped 6.4% after flagging a 77% decline in April-June operating profit. Hanwha Ocean Co Ltd. (KRX:042660) plunged 22.7% after Canada chose German submarines over South Korean options. Losses spread across Asia, with Tokyo’s Nikkei 225 down 2.1%, Hong Kong’s Hang Seng falling 0.7%, Shanghai’s Composite losing 1.3%, and Taiwan’s Taiex declining 2.3%. In the U.S., the S&P 500 closed up 0.7% and the Nasdaq Composite added 1.1% on Monday.
Outlook
Stephen Innes at SPI Asset Management called the Samsung slide the “first proper AI stress test,” noting that the decline came after a very strong quarter, not a demand warning. Samsung will release its full Q2 results and earnings breakdown by division on July 30. The market will also watch the SK Hynix ADR pricing and debut later this week.
