Power Semiconductor corporations DB HiTek jumped more than 15% in early trading on the 26th. The rise is seen as driven by news of its addition to the KOSPI 200 index and strength in semiconductor stocks.
As of 10:04 a.m. that day, DB HiTek was trading at 209,500 won on the Korea Exchange, up 28,400 won (15.68%) from the previous session. It climbed to as high as 224,500 won early in the session, setting an all-time high.
Korea Exchange (KRX) said after the close on the 22nd that it will add DB HiTek, HD Construction Equipment, d'Alba Global, and OCI to the KOSPI 200 index and remove GS Engineering & Construction, Sebang Global Battery, Grand Korea Leisure, and GC Holdings. The revised constituents will take effect on the 12th of next month.
Index inclusion is seen as a positive because it can attract passive inflows such as exchange-traded funds (ETFs).
Earnings improvement is also being confirmed. DB HiTek posted first-quarter revenue of 374.6 billion won and operating profit of 63.7 billion won this year. Revenue rose 26% from a year earlier, and operating profit increased 21.4%. Even with a one-off expense of 22.1 billion won from the disposal of treasury shares for the purpose of contributing to the in-house employee welfare fund, the standalone operating margin came in at 22.4%.
Jung Min-gyu, an analyst at Sangsangin Investment & Securities, said, "From the second quarter, price hikes for BCD products to China are expected to be reflected in earnest," and noted, "In the 8-inch foundry market, with the possibility of supply contraction being raised as leading companies shift to 12-inch, beneficiaries are expected as the market enters a full-fledged price increase (P up) cycle."