20150731-三星证券-August_2015__Time_to_rebalance_15页_359kb

Samsung Model Portfolio Summary - August 2015

Core Content

The Samsung Model Portfolio for August 2015 is a strategic investment guide designed to outperform the Kospi index. The portfolio is managed by the Strategy Team, including Seung Min You (Chief Strategist), ChongKyu Juhn, and Hyein Ok. The report outlines the performance of the portfolio in comparison to the Kospi, the outlook for the market, and the sector and stock weighting adjustments made for the month.

Portfolio Performance vs Kospi (As of Jul 31)

Key Points of August Outlook

• Market Outlook: The Kospi is expected to remain in a sideways range throughout August due to lingering uncertainties around 2Q earnings and the US exit strategy. However, the Samsung Intensity Oscillator suggests a potential bottom in July.
• Beta: The portfolio beta is set at 1.07, slightly higher than the previous month's 1.06.
• Earnings Forecast: The 2H and 2015 consensus forecasts for Korean earnings are expected to fall, but the MSCI Korea operating profit is projected to grow by 10%.
• Won Depreciation: The won is expected to weaken further against the US dollar, which should benefit corporate earnings in the second half of the year.
• Strategy Adjustment: Investors should shift their focus from high P/E stocks to deeply undervalued ones as market conditions evolve and the first US rate hike approaches.

Sector Weighting Adjustments

The portfolio has made the following changes to its sector weightings:

Portfolio Changes

Stocks Added:

• KB Financial Group (5%)
• LG Hausys (3%)
• Seah Besteel (3%)
• Grand Korea Leisure (3%)
• LG Household & Health Care (3%)
• CJ Corporation (3%)
• Samsung Electro-Mechanics (2%)
• GS Home Shopping (2%)
• Hyundai Glovis (2%)

Stocks Removed:

• BNK Financial Group (0%)
• Sungshin Cement (0%)
• Hyundai Steel (0%)
• CJ CheilJedang (0%)
• Lotte Chilsung (0%)
• SK Hynix (0%)
• Hyundai E&C (0%)
• Amorepacific (0%)
• SK Chemicals (0%)

Increased Exposure:

• Samsung Electronics (17%)
• Hyundai Motor (5%)

Decreased Exposure:

• Kia Motors (2%)
• Korea Investment Holdings (3%)
• LG Chem (3%)
• Kepco (3%)
• SK Innovation (3%)
• SK Telecom (2%)

Strategic Recommendations

• Rebalance: The report recommends rebalancing the portfolio in light of the expected sideways movement in the Kospi and the shift in market focus toward fundamentals.
• Valuation Strategy: Investors should reduce exposure to high P/E stocks and increase exposure to undervalued stocks to prepare for a potential market correction.
• Exporters: Key exporters such as Samsung Electronics and Hyundai Motor are expected to benefit from won depreciation.
• MERS Impact: Companies hit hard by the MERS outbreak, such as Grand Korea Leisure and LG Household & Health Care, are being added to the portfolio.
• Avoid Overexposure: The portfolio is underweight on the healthcare, industrial goods, materials, and utilities sectors.

Summary of Key Adjustments

• Consumer Discretionary: Increased by 4% to 20%
• Industrials: Increased by 2% to 12%
• Healthcare: Decreased by 2% to 0%
• Energy, Materials, Telecom Services, and Utilities: Decreased by 1% each to 3%, 9%, 2%, and 3%, respectively
• Key Exporters: Increased exposure to Samsung Electronics and Hyundai Motor
• Undervalued Stocks: Added KB Financial Group, LG Hausys, and Seah Besteel
• MERS-Affected Stocks: Added Grand Korea Leisure and LG Household & Health Care

Conclusion

The Samsung Model Portfolio for August 2015 reflects a strategic shift in focus to sectors with solid earnings momentum and undervalued stocks, while reducing exposure to those with weaker fundamentals. The report emphasizes the importance of rebalancing and adapting to market conditions as the US rate hike approaches. The portfolio is designed to outperform the Kospi by 10% annually.