Retailers keep to Samsung Elec, Kakao, with 15% of population owning the stocks

Retailers stayed faithful to South Korea’s household respective hard and soft powers Samsung Electronics and Kakao either willingly or unwillingly as their stock prices have nearly halved from the peaks of last year, with 15 percent of the country's population owning a part of one of the two companies as of June.

Samsung Electronics has 5.92 million minority shareholders and Kakao 2.04 million, as of the end of June, according to their biannual reports. When combined, the figure reaches 7.96 million, which is tantamount to 15 percent of South Korea's population of 51.6 million.

A minority shareholder is a shareholder who owns less than one 100th of outstanding shares.

Even as the two stocks skidded throughout the year, more retailers joined onboard.

Samsung Electronics added 856,342 from December 2021 and Kakao 122,977.

As of June, minority shareholders own a combined 66.33 percent stake of Samsung Electronics and 62.84 percent of Kakao. And they are bleeding from their ownership.

Samsung Electronics shares traded at 61,500 won ($46.30) on Aug. 18, down 21.46 percent from this year’s opening. The stock lost 15.43 percent alone in June when global recession fears started intensifying. It is down 36.47 percent compared to the historic high of 96,800 won recorded in early 2021.

Kakao shares are trading around 79,200 won now, down 29.6 percent compared to the beginning of the year. It lost 54.22 percent from the peak in June 2021.

Individual investors of Samsung Electronics have purchased Samsung Electronics at 66,939 won on average so far this year, meaning they would have lost 8.1 percent on average. They have net bought 15.5 trillion won worth over the period, resulting in a combined 1.26 trillion won loss in value.

Kakao’s minority shareholders have bought the internet stock at 88,794 won apiece on average, 10.8 percent higher than the current price. Their net purchase amounts to 1.6 trillion won, resulting in an estimated loss of 29 billion won in total.

Foreign and institutional investors have been net sellers of the two stocks throughout the year. Foreign investors have net sold 8.4 trillion won worth in Samsung Electronics and 1.2 trillion won worth in Kakao.

Analysts are skeptical about any quick recovery in Samsung Electronics and Kakao stocks amid persisting fear of global recession.

Kiwoom Securities projects the operating income of Samsung Electronics to fall 7.2 percent on year to 49.4 trillion won in 2023, with a profit margin of DRAM declining by 3 percentage points and that of NAND flash by 6 percentage points.

Kakao is expected to maintain its earnings growth streak with operating profit projected to jump 33 percent on year to 950.4 billion won in 2023, according to Daol Investment & Securities. However, the price outlook for the internet stock remains grim as investors already had factored in the platform giant’s future growth potential earlier in 2020 and 2021. Slower growth is also expected for its advertisement income.

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