The National Pension Service, South Korea's largest institutional investor, has recently sold some of its shares in Hyundai Rotem and Doosan Enerbility, both of which saw significant stock price increases due to defense and nuclear power issues. In contrast, the fund has increased its holdings in HS Hyosung Advanced Materials and HJ Heavy Industries. While these companies are all part of advanced industries such as defense, aerospace, and carbon fiber, analysts suggest that the differing investment decisions reflect expectations for recovery in core business operations as the third-quarter earnings season approaches.
According to the Financial Supervisory Service's electronic disclosure system, the National Pension acquired 45,328 shares of HS Hyosung Advanced Materials on August 20. This increased its stake in the company from 5.86% in January to 6.87% in just seven months. Additionally, the fund purchased 22,391 shares of HJ Heavy Industries in July, raising its ownership from 5% to 5.02%. This marks the first purchase of HJ Heavy Industries shares in eight years, following the sale of 1,085,314 shares in 2018. The recent stock prices of both companies have dropped by 26.1% and 25%, respectively, compared to the time of the National Pension's acquisition.
Conversely, the National Pension sold 1,103,422 shares of Hyundai Rotem in the third quarter, reducing its stake from 8.08% as of January 31, 2024, to 7.07% in July. Hyundai Rotem's stock price surged by 333.9%, from 28,350 won at the end of January 2024 to 123,000 won recently.
During the same period, the National Pension also reduced its investment in LG Chem. In July, it sold 707,035 shares, decreasing its stake from 8.64% to 7.64%. On July 29, it sold 1,503,546 shares of Doosan Enerbility, lowering its ownership from 7.86% to 7.63%. Since the National Pension acquired these shares in March 2025, LG Chem's stock has risen by 19.8%, while Doosan Enerbility's has increased by 250%.
While all these sectors are classified as advanced industries, they differ slightly in focus. HS Hyosung Advanced Materials specializes in manufacturing aramid and carbon fibers, known as 'super fibers,' as future growth drivers. HJ Heavy Industries possesses expertise in constructing special vessels such as large transport ships and high-speed landing craft. As the aerospace, defense, future vehicle, and hydrogen storage sectors show potential for future value, the National Pension's investments reflect a strategy aligned with the recovery cycle of its core businesses in tires and shipbuilding.
Hyundai Rotem, LG Chem, and Doosan Enerbility also share similarities in their focus on next-generation growth drivers in defense, secondary batteries, and nuclear power. However, despite their high growth potential, analysts predict that the weak performance of their core businesses in railways and petrochemicals may lead to disappointing earnings expectations in the second half of the year.
A securities industry official stated, "It appears that the National Pension has shifted its focus from large-cap stocks that have seen price increases ahead of the third-quarter earnings season to smaller-cap stocks with significant potential for performance and order improvements."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.