KOSPI Falls Despite Samsung Electronics’ Quarterly Operating Profit of KRW 107 Trillion… Focus Turns to What Comes After Earnings and the Trump Factor

The KOSPI fell more than 1% to 6,735 points, while the KOSDAQ declined about 0.6% to 893 points. Foreign investors sold both cash equities and futures, extending their net selling on the KOSPI to four consecutive trading sessions. The won-dollar exchange rate rose to KRW 1,339, reflecting a stronger dollar.

U.S. equities paused near record highs, with the S&P 500 and Nasdaq each closing slightly lower, down in the 0.2% range. Concerns over a sharp rise in U.S. Treasury yields weighed on markets during the session, but losses narrowed somewhat after demand was seen at the 10-year Treasury auction. Investors focused on whether long-term yields could stabilize at elevated levels.

The U.S. 10-year Treasury auction cleared at a yield of about 5.3%, while indirect bids, including those from foreign central banks, accounted for 80.3%, above the average of 72.4%. The auction cleared 1.7 basis points below the when-issued yield, pushing yields back from their highs immediately afterward, but they later rose above 5.3% again. The 20-year and 30-year yields also returned to around 5.737% and 5.695%, respectively. The upcoming 30-year auction was seen as the next indicator of demand for bonds.

Samsung Electronics reported preliminary third-quarter revenue of KRW 195 trillion and operating profit of KRW 107.4 trillion. Revenue fell short of the market estimate of about KRW 200.8 trillion, but operating profit exceeded the estimate of approximately KRW 106 trillion. The operating margin calculated from the reported figures was 55.1%, above the market forecast of 52.3%.

Operating profit rose from about KRW 12 trillion in the same period a year earlier to more than KRW 100 trillion in just one year. Quarterly operating profit increased from about KRW 57 trillion in the first quarter to KRW 89 trillion in the second and KRW 107 trillion in the third. Strong semiconductor sales and rising prices drove the increase. The broadcast noted that Samsung Electronics had set a new record for quarterly corporate operating profit, excluding Saudi Aramco.

Market expectations for fourth-quarter and 2027 earnings are also rising. A KB Securities forecast cited on the broadcast projected a higher share of HBM in revenue and rising prices. Some reports also said Samsung Electronics had quoted HBM prices at three times their previous level. Expectations were raised that next year’s consensus operating profit could climb from the previous range of KRW 530 trillion to more than KRW 600 trillion.

A KB Securities report estimated that, assuming KRW 110 trillion in resources for shareholder returns from 2024 to 2026, cash dividends could total KRW 70 trillion to KRW 80 trillion and share buybacks KRW 20 trillion to KRW 30 trillion. This scenario would put shareholder returns at more than four times the previous estimate. Given Samsung Electronics’ policy of returning 50% of free cash flow, the prospect that dividends and share buybacks could both expand as earnings grow was cited as a factor that could prompt a revaluation of the stock.

Micron Technology rose 4% in the previous session to close at $108. DA Davidson maintained its Buy rating and raised its price target from $2,100 to $3,000. The target was described as the highest on Wall Street.

The report cited memory demand driven by investment in artificial intelligence and a supply shortage that could persist through 2028. It also projected that long-term supply contracts could account for as much as 50% of revenue. The higher price target reflected primarily an increase in the valuation multiple applied to memory companies, rather than a substantial upward revision to revenue forecasts.

The forward price-to-earnings ratios compared on the broadcast were about 5.2 times for Micron and around 4 times each for Samsung Electronics and SK hynix. The hosts noted that, if greater visibility into the business cycle from rising memory prices and long-term supply contracts is reflected in valuations, investors could shift from viewing memory makers as cyclical stocks to treating them as growth stocks. This potential revaluation, however, is a market interpretation based on forecasts and valuation assumptions.

LG Energy Solution reported third-quarter operating profit of KRW 756 billion, 163% above the market estimate of about KRW 320 billion. Revenue was described as reaching a record quarterly level. Improved factory utilization in North America and Europe, along with a recovery in electric-vehicle battery production, lifted earnings.

Benefits from the U.S. Advanced Manufacturing Production Credit (AMPC) totaled KRW 416.9 billion. A key feature of the results was that earnings improved substantially even excluding the tax credit. The explanation was that while AMPC contributed to a profit in the previous quarter, the company this time delivered operating performance that exceeded the benefit.

The broadcast emphasized that higher utilization at battery companies’ North American facilities is reducing fixed-cost burdens and turning increased sales into higher profits. Prospects for an expansion in orders in 2027 were also discussed. The faster-than-expected earnings recovery and growing demand for energy storage systems (ESS), alongside electric-vehicle batteries, were cited as factors that could shape future results.

KOSDAQ pharmaceutical and biotech stocks were broadly weaker. The broadcast said the biotech sector’s market capitalization had fallen by about 19%, or roughly KRW 17.7 trillion, in the second quarter. News related to Alteogen and Peptron further dampened investor sentiment on the day.

Alteogen fell after reports that a Dutch court had granted an injunction related to Merck’s Keytruda SC product, which uses Alteogen’s subcutaneous (SC) formulation technology. The decision could temporarily restrict manufacturing, sales and imports in eight countries, including Belgium, Denmark, France, Ireland, Italy, Sweden and Switzerland. The company said it did not view the matter as a major problem, citing the status of proceedings in other countries.

The broadcast said it was important to distinguish this decision from a final ruling on the merits of the patent, as it was an injunction. Citing differing assessments of the opposing party’s patent claims in earlier proceedings in the United Kingdom and the United States, it said there could be room to contest the decision on appeal. By contrast, concerns over Peptron’s commercialization prospects came directly to the fore after an evaluation of its long-acting drug platform with Eli Lilly concluded without leading to a definitive agreement.

Peptron’s platform was described as a technology that gradually releases a drug’s active ingredient, extending the interval between doses for medicines that otherwise require repeated administration. A joint evaluation with a global pharmaceutical company began about two years ago, but no follow-up agreement or move into commercialization was announced after the evaluation ended. The broadcast said the news raised concerns about the technology’s commercial viability and its appeal to global pharmaceutical companies.

The rechargeable battery sector showed signs of improvement, underpinned by a recovery in production in North America and Europe. Growth in the electric-vehicle market and a rebound in battery output were cited as drivers of the earnings recovery. Utilization has risen at overseas production facilities that had faced high costs due to low operating rates, improving profitability.

ESS has emerged as a new growth pillar for the battery industry. Previously, expectations centered on ESS accounting for around 20% of total revenue, but recent assessments suggest its growth is faster than anticipated. A recovery in both vehicle batteries and ESS was cited as supporting not only growth in the sector’s overall scale but also an improvement in its business mix.

The broadcast attributed the previous sharp decline in battery stocks to weak earnings and said any recovery in share prices would depend on the sustainability of an actual earnings improvement. LG Energy Solution’s strong results were presented as a sign that the sector’s recovery could arrive sooner than expected. However, it is important to distinguish among individual companies’ utilization rates, orders and the effects of tax credits.

According to the September Federal Open Market Committee (FOMC) minutes, most participants thought it would likely be appropriate to raise the federal funds rate once more by year-end. The minutes also confirmed that future decisions would depend on incoming economic data. After the minutes were released, markets put the probability of no rate change in October at above 80%, though some argued that economic developments since September still needed to be taken into account.

The hosts interpreted the September rate hike less as a move to aggressively suppress current inflation and more as risk management—a form of insurance against additional inflation risks. Given that geopolitical tensions pushing up oil prices and increased investment in artificial intelligence were cited as inflationary factors, they reasoned that whether the Fed actually delivers another hike could depend on the data if those conditions change. Another interpretation was that Fed officials might consider the policy rate insufficiently restrictive, or only mildly restrictive, leaving room for further increases.

The minutes also highlighted the view that AI-related investment and demand could push up prices in the near term. Expanded data-center construction and related investment could increase costs and financing needs in the short run. While some argue that AI could raise productivity and lower inflation over the longer term, the time it may take for productivity gains to feed through to prices remained a source of uncertainty in policy decisions.

Kim Kyung-il, a professor of psychology at Ajou University, said Trump is difficult to explain using established personality types alone. Many classification systems for human behavior rely on historical data, he explained, and as society becomes more complex and diverse, more cases fall outside their explanatory reach. Kim identified as a key criterion whether a person is focused solely on personal interest or also cares about the interests of others and coexistence.

Kim said the purpose behind an action matters more than the act of unsettling and making another person anxious in itself. He linked to what psychology calls a “malicious” disposition the attitude of being drawn to an option that causes another person greater pain, even when a better outcome could be achieved another way. Rather than assigning Trump a categorical moral label, he said, it is necessary to examine his self-centeredness and the motives behind behavior that unsettles others.

Kim described Trump as “calculatedly impulsive.” Rather than weighing a series of possible outcomes after acting, people of this type may focus on the other person’s immediate next reaction—whether they feel hurt or afraid. Combined with a narcissistic belief in one’s own superiority, this can lead to an abrupt change in behavior when others do not respond as expected, making it difficult to predict outcomes through a single scenario.

When dealing with an impulsive leader, the speed and timing of a response matter more than immediately signaling agreement or opposition, Kim advised. Delaying the immediate reaction the other person wants can help avoid being fixed as a target for confrontation or harassment, while buying time to observe their next move. However, one should not wait so long that the other person feels their position is being ignored. If ten countries or organizations are responding, he suggested responding at roughly the pace of the seventh or eighth.

Kim said people like Trump do not necessarily act the same way in every position. Strong drive can be useful when breaking with bad established practices, but the harmful effects of power can grow if the qualities and duties required of a national leader are not properly defined. He said leaders should not be viewed simply as people at the top of an organization’s promotion ladder; the roles of presidents and world leaders need to be redefined.

Asked about the possibility that Trump might refuse to accept defeat in a U.S. election, Kim cited the case of chess champion Bobby Fischer. Actions that disregard established rules can win public support for a time, he explained, but that support can also disappear rapidly once a threshold is crossed. Rather than asserting a particular outcome, Kim said, it is important to prepare multiple scenarios and develop response plans tailored to the other party’s actions.

Lee Kwang-soo said Samsung Electronics’ quarterly operating profit exceeding KRW 100 trillion was more than an exceptional earnings record; it was large enough to alter the company’s capacity to invest. Even if the share price fell on the day of the earnings announcement, he argued, the accumulation of quarterly profits and cash-generating capacity could eventually change the market’s assessment. He emphasized that the significance of the results should not be discounted based solely on share-price movements.

He said investment in facilities and research and development for the future—particularly in software and ecosystems—was as important as returning profits to shareholders. Nvidia did not build its competitive edge through GPU sales alone; it raised barriers to entry by developing a software ecosystem over many years, including its CUDA platform. In Lee’s view, Korean companies should also invest in building long-term competitive advantages now that they have greater financial capacity.

Lee cited Samsung Electronics’ ability to operate in memory, system semiconductors and foundry services as a point of differentiation. The foundry business is expected to post a loss because of low utilization at its U.S. plant and depreciation costs, but results could improve as utilization rises. His commentary was that investors should look beyond short-term earnings and assess whether the combination of foundry and memory businesses can create a durable long-term moat.

Lee said he would support investors not only when share prices rise, but also focus on fundamentals without being swayed by gains and losses. He expressed the expectation that Samsung Electronics’ corporate value could be reassessed as earnings accumulate and shareholder returns and future investment take concrete shape. This was presented as the host’s investment perspective, not as a settled market forecast.