20170628-三星证券-Bull_run_taking_a_breather_38页_1mb

Samsung Model Portfolio Summary (July 2017)

Core Content

The Samsung Model Portfolio is a strategic investment approach designed to outperform the Kospi index. The report provides an analysis of the portfolio's performance, sector adjustments, and outlook for the month of July 2017.

Main Points

Portfolio Performance vs Kospi (May 26 - Jun 27)

• Samsung Model Portfolio: 2.91% (1m), 16.37% (3m), 24.03% (6m), 24.95% (12m)
• Kospi: 1.56% (1m), 14.36% (3m), 20.59% (6m), 20.60% (12m)
• Relative Performance: 1.35% (1m), 2.01% (3m), 3.44% (6m), 4.35% (12m)

July Outlook

• The Kospi is expected to end the month up, marking its seventh consecutive monthly gain, the longest since 1980.
• Historical data shows that such bull runs have often been followed by a drop of 3–6% in the seventh month.
• Despite the rally, technical indicators suggest the market is not overbought.
• Earnings forecasts are still rising, which should limit downside risk.
• The Samsung Universe's EPS is expected to grow by 49.2% y-y in 2017, a 22% increase from the end-2016 forecast.
• Psychological fatigue is growing due to the long rally, so the report recommends sector rotation in July.
• The IT sector is still recommended for a buy & hold strategy, while steel, chemicals, transportation, banking, and securities are highlighted as sectors with strong earnings outlooks but limited share price movement.
• The Kospi target range for July is set at 2,300–2,450.

Sector Rotation Recommendations

• Overweight: Consumer discretionary, financial, and materials sectors.
• Underweight: Consumer staples, industrial goods, and IT sectors.

Portfolio Changes

• Reduced exposure to energy, industrial goods, and IT sectors.
• Increased exposure to healthcare, materials, and utilities sectors.
• Specific changes include:
  • Added: Yuhan, NHN Entertainment, Kepco, KCC, Hansae, and SK Telecom.
  • Removed: Hyundai Engineering & Construction, Paradise, Samsung Electro-Mechanics, Jusung Engineering, KT, and Kogas.

Key Portfolio Changes

Exposure Adjustments

• Healthcare: Increased from 0% to 3%
• Materials: Increased from 11% to 13%
• Utilities: Increased from 2% to 3%
• Energy: Reduced from 3% to 2%
• Industrial Goods: Reduced from 14% to 12%
• IT: Reduced from 34% to 31%

Sector Overweight/Underweight

• Overweight: Consumer discretionary, financial, and materials sectors
• Underweight: Consumer staples, industrial goods, and IT sectors

Beta

• Portfolio beta for July is 1.07, down from 1.12 in June.

Active Risk by Industry

• A chart (not included here) illustrates the active risk for each industry in July, indicating the model's strategic risk management in anticipation of a market correction.

Portfolio Weightings by Sector

Summary of Portfolio Changes

Added Companies

• Yuhan (3%)
• NHN Entertainment (3%)
• Kepco (3%)
• KCC (2%)
• Hansae (2%)
• SK Telecom (2%)

Removed Companies

• Hyundai Engineering & Construction (0%)
• Paradise (0%)
• Samsung Electro-Mechanics (0%)
• Jusung Engineering (0%)
• KT (0%)
• Kogas (0%)

Increased Exposure

• Hana Financial Group (from 3% to 4%)

Reduced Exposure

• Samsung Electronics (from 23% to 22%)
• Samsung Life Insurance (from 4% to 3%)
• SK Innovation (from 3% to 2%)
• SK Hynix (from 3% to 2%)

Conclusion

The Samsung Model Portfolio is adjusting its sector allocations in response to the ongoing bull market and signs of potential correction. The focus is on diversifying exposure to sectors with strong fundamentals and earnings growth, while reducing risk in overvalued areas. The report emphasizes the importance of sector rotation and the continued strong outlook for the IT sector.