Korea's AI stock market big winner! National Pension made a profit of 189 trillion won in the second quarter, with Samsung and SK Hynix contributing nearly 80%.

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The AI-driven semiconductor bull market has swept through the Korean stock market, making Korea’s National Pension one of the biggest institutional winners. In the second quarter alone, it enjoyed an unrealized gain of nearly 190 trillion won, marking the highest quarterly record, with the bulk of this profit coming almost entirely from the semiconductor giants Samsung Electronics and SK Hynix.

According to Yonhap News Agency on Wednesday, as the KOSPI Index broke through 9,000 points for the first time in history in Q2 and continued to run at a high level, the valuation of domestic listed stocks held by the National Pension surged by 189.5684 trillion won (approximately 850 billion RMB) within three months, with a quarterly return rate as high as 63.9%. This increase was over 100 trillion won higher than the first quarter, setting a new historical quarterly record.

Among them, the combined valuation increase of holdings in Samsung Electronics and SK Hynix reached 151 trillion won (approximately 677 billion RMB), accounting for 79.8% of the overall gain. Notably, for the first time this quarter, SK Hynix surpassed Samsung Electronics in contribution, becoming the National Pension’s single largest source of profit.

With the temporary suspension of domestic stock rebalancing for the National Pension ending at the end of June, the market is closely watching the potential amount of selling that may be released from July, which may exert short-term pressure on the Korean stock market due to this uncertainty.

SK Hynix leads, semiconductor giants support 80% of the gains

Financial information provider FnGuide shows that, as of July 6, the total value of stocks held and publicly disclosed by the National Pension in 270 listed companies with holdings over 5% was 486.0118 trillion won (approximately 2.18 trillion RMB), a significant jump from the 296.4433 trillion won at the end of March.

SK Hynix was the brightest contributor this quarter. The National Pension’s shareholding in SK Hynix remained unchanged at 7.50%, but the value of its holdings soared from 43.156 trillion won at the end of March to 125.2968 trillion won, an increase of 82.1407 trillion won (approximately 368.3 billion RMB), up 190.3% in a single quarter.

For Samsung Electronics, the National Pension’s holding ratio increased slightly from 7.75% to 7.84%, with the valuation rising from 76.6842 trillion won to 145.8467 trillion won, an increase of 69.1626 trillion won (approximately 310.1 billion RMB), up 90.1%.

The combined share of these two companies in the National Pension’s domestic stock portfolio has risen significantly, from 40.4% at the end of March to 55.7%, greatly increasing concentration.

Comprehensive benefit across the semiconductor value chain, SK Square and Samsung Electro-Mechanics rise to the forefront

The rise across the semiconductor industry chain has driven broader gains in holdings. SK Square’s holding valuation increased by 11.9953 trillion won (approximately 53.8 billion RMB), ranking third by increase. Despite its shareholding dropping from 10.46% to 9.95%, Samsung Electro-Mechanics’ holding value still increased by 10.4072 trillion won (approximately 46.7 billion RMB), ranking fourth.

Additionally, Samsung C&T increased by 2.7278 trillion won, Samsung Life by 2.5137 trillion won, SK by 2.0577 trillion won, all recording considerable gains.

In the second quarter, a total of 19 stocks newly entered the over-5% holding disclosure list, including Simtech and SK Eternix; 21 stocks dropped out of the 5% threshold, including LX Semicon and Korea Tourism. The stocks with the largest increase in holdings were BH (holding ratio from 7.47% up to 13.35%) and DL E&C (from 8.06% up to 11.44%).

Some holdings shrank significantly, technology and new energy sectors under pressure

Not all holdings recorded positive returns. Mirae Asset Securities, which performed well in Q1, saw its value reduce by 1.0717 trillion won (approximately 4.8 billion RMB) in Q2, making it the largest single loss.

LG Energy Solution’s valuation shrank by 573.7 billion won, Hanwha Systems decreased by 451 billion won, Kakao and Naver dropped by 447 billion won and 415.3 billion won respectively, with the Internet and new energy sectors overall lagging behind semiconductors.

At the same time, the National Pension reduced holdings in LG, SK Chemicals, Daewoo Electronic Materials, Vinatech, among others, and the number of holdings exceeding 10% of total shares dropped slightly from 34 at the end of last quarter to 32.

Despite impressive second quarter returns, the National Pension’s next moves have raised market caution. Previously, to support the domestic stock market, authorities implemented a temporary suspension of rebalancing operations for the National Pension’s domestic stock allocation, which officially ended at the end of June.

With the significant rise in the share of semiconductor giants in holdings, if the National Pension starts rebalancing to restore predetermined asset allocation proportions, it may need to reduce some domestic stock positions. Market participants are closely watching the potential size of selling from July to gauge its actual impact on the Korean stock market.

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