Retail investors in South Korea are increasingly focusing their investments on Chinese technology and manufacturing assets. According to data from the Korea Securities Depository (KSD), from the beginning of April until last Friday, Korean investors significantly increased their holdings in major Chinese technology companies. Their purchases have expanded from ETFs to individual stocks, covering various hardware manufacturing sectors such as new energy batteries, semiconductors, chemicals, and printed circuit boards.
Data from the KSD for January to March this year showed that only one non-US asset appeared on the monthly top 50 net buying list by Korean retail investors: the Global X China Electric Vehicle & Battery ETF, which entered the list in March. Historically, this ranking has been dominated by US stock ETFs and large-cap US tech stocks, indicating a subtle shift in the flow of retail capital.
Previously, in November of last year, Hong Kong-listed stocks such as Pura Gold, Alibaba, and Xiaomi also attracted favor from Korean retail investors. This wave of buying coincides with the Korea Composite Stock Price Index (KOSPI) surpassing the 6,600 point mark for the first time on Monday this week, with domestic chip leaders like Samsung Electronics and SK Hynix being the primary drivers.
The semiconductor investment theme is extending beyond South Korea to include Japan and China. In addition to Chinese assets, Japanese NAND flash memory manufacturer Kioxia has emerged as a prominent single target in this round of buying by Korean retail investors. Kioxia, which originated from Toshiba's memory business, is one of the world's major suppliers of NAND flash memory. This investment pattern suggests that the semiconductor investment logic of Korean retail investors is no longer confined to domestic leaders like Samsung Electronics and SK Hynix but is expanding to include listed semiconductor companies in Japan and select Chinese technology and manufacturing targets.
Overall, the capital flows point towards a global industrial chain investment strategy centered on semiconductors, the artificial intelligence supply chain, electric vehicle batteries, and Chinese hardware manufacturing. In terms of the structure of the targets, this round of buying of Chinese assets by Korean retail investors features both Hong Kong-listed and A-shares. On the Hong Kong stock front, Contemporary Amperex Technology Co. Limited (CATL) H-shares, Hua Hong Semiconductor, Alibaba, and Xiaomi have all appeared on the net buying list. Regarding A-shares, printed circuit board companies like Shengyi Technology have garnered attention, alongside other purchases including China National Chemical Engineering and Sieyuan Electric Co., Ltd.
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