Shinyoung Securities Research Institute wrote a self-reflection paper again this year. Since 2022, the institute has been diagnosing shortcomings in market, asset, and industry forecasts at the end of each year and presenting improvement plans and outlooks for the new year.
Kim Hak-kyun, head of Shinyoung Securities Research Institute, and 16 researchers published the report 'My Mistake in 2024' on the 30th. The report consists of a total of 46 pages of A4 paper, containing overall assessments of the assets and industries assigned to each researcher.
Eom Gyeong-a, a researcher in the transportation, shipbuilding, and machinery sectors, noted, 'We misjudged the shipping industry and failed to provide predictability to shippers,' and Seo Jeong-yeon, who handles the distribution, textiles, and internet sectors, said, 'We underestimated the deep-rooted disappointment that resulted from inefficient capital utilization.'
The fierce competition from Chinese corporations was also cited as a factor behind the inaccurate early-year forecasts. Park Sang-wook, a researcher in semiconductors, stated, 'The drop in memory semiconductor prices was faster than expected,' adding, 'It was a problem that we overlooked China.' He continued, 'We thought U.S. sanctions would limit the production capacity of Chinese semiconductor firms, but the D램 shipments from Chinese companies exceeded estimates.'
Shinyoung Securities assessed that Korean industries and stocks that allowed reversals to China will need vigilance even in 2025. The concern is that seemingly inexpensive valuations may lead to a 'value trap.'
Kim Hak-kyun remarked, 'I think the biggest challenge facing the Korean economy and stock market, which has many worries, is China,' adding, 'China is pressuring Korea not only through technological innovation but also through dumping tactics.' He further stated, 'There are signs of oversupply from China in sectors such as steel, petrochemicals, solar power, displays, and secondary batteries,' and noted that 'the depreciation of the yuan, seemingly tolerated by Chinese authorities to counter the tariff threats from U.S. President Donald Trump, is also a burden on the Korean economy.'
Kim indicated that he does not see the Chinese economy being very optimistic, as it has relied on exports and real estate investments. However, he emphasized that it's important to note that South Korea and Germany, which benefited from China's growth, are now suffering significant impacts.
Kim stated, '(Korean corporations) need to accurately assess the impact they receive from China,' and added, 'Even considering this, there are many cheap stocks, and I expect the (Korean) market in 2025, but we must carefully avoid the China trap.'