KOSPI Slips Below 6,000 as Samsung Shares Tumble Despite Record Profit, Ending SK Hynix-Fueled Euphoria Rally

South Korean stocks fell on Thursday, and the benchmark KOSPI dropped back below 6,000. Samsung Electronics shares slid after the company's record third-quarter results fell short of the market's high hopes for its chip business.

The KOSPI closed at 5,937.66, down 74.78 points, or 1.24%. A day earlier the index had soared 6.63% to a record close of 6,012.44.

The smaller KOSDAQ fared worse, falling 18.05 points, or 2.34%, to 753.23.

Early gains reverse after Samsung results

The KOSPI opened higher, following overnight gains on Wall Street after the U.S. Federal Reserve held interest rates steady. It climbed as high as 6,100.11 in early trade.

The mood shifted shortly before 10 a.m., when Samsung released its quarterly earnings. The index fell more than 2% during the morning before recovering some ground in the afternoon.

Record profit, but not enough

Samsung reported third-quarter operating profit of 107.44 trillion won (about $80 billion), up 783% from a year earlier. It was the first time the company's quarterly operating profit had exceeded 100 trillion won.

Revenue rose 126.9% to 195.25 trillion won. Both figures were records for a fourth straight quarter.

Key figures from Samsung's third quarter:

Operating profit: 107.44 trillion won, up 783.1% Revenue: 195.25 trillion won, up 126.9% Chip division operating profit: 106.5 trillion won Chip division revenue: 147.1 trillion won Quarterly dividend: 4,601 won per share, about 30 trillion won in total

Overall operating profit beat the average market forecast of 105.68 trillion won by about 1.7%, according to Seoul Economic Daily. But the semiconductor division, which accounted for almost all of the company's profit, came in below some market participants' estimates of about 110 trillion won.

"Expectations for semiconductor earnings had become extremely high," an official in the securities industry told Seoul Economic Daily. "Profit in the chip division came in below expectations, which appears to have soured investor sentiment."

Samsung shares fell nearly 5% during the morning after rising almost 3% to 249,000 won before the results.

Shareholder return plan disappoints

Investors were also looking for more detail on shareholder returns.

Samsung said it plans to return up to 110 trillion won to shareholders this year, including the 30 trillion won in third-quarter dividends. The remaining 55 trillion to 75 trillion won, through dividends and buybacks, will be finalized at a board meeting in January.

Local media reported that some investors were disappointed by the lack of concrete steps, such as cancelling treasury shares.

The comparison with SK hynix was hard to miss. On Wednesday SK hynix reported record results and announced roughly 100 trillion won in shareholder returns, sparking the KOSPI's biggest single-day gain in years.

Analysts look for supply clarity

Han Ji-young, an analyst at Kiwoom Securities, said investors will focus on the details of Samsung's chip business, including "the size of long-term supply contracts, conditions for price negotiations and medium- to long-term volume sales."

"We need to see whether confidence in future earnings for the semiconductor sector can recover further," Han said, according to Seoul Economic Daily.

Samsung said it expects fourth-quarter earnings growth led by semiconductors. It forecast that memory demand will outpace supply next year and said it plans to increase sales of HBM4 high-bandwidth memory and begin mass production of the next-generation HBM4E.

The company plans 84.4 trillion won in capital spending this year, including 76.8 trillion won for its chip division.

Profit-taking after record run

Market watchers also pointed to profit-taking after Wednesday's surge, which had pushed the KOSPI above 6,000 for the first time.

According to morning reports, SK hynix was the only major large-cap stock to gain as investors stayed with the chipmaker after its blowout quarter.

Seoul Economic Daily reported that LG Energy Solution shares fell about 8% after LG Chem sold part of its stake in the battery maker, raising about 2.5 trillion won.

Won strengthens

The Korean won gained against the U.S. dollar. Lower U.S. rate-hike fears after the Fed's decision eased some pressure on emerging market currencies.

The Fed held its benchmark rate in a range of 3.75% to 4% on a 10-2 vote, with two dissenters favoring a hike. Markets are pricing a possible increase in December.

What's next

Investors will look to further earnings from Korean exporters and global tech companies in the coming days for signs of whether the AI-driven memory boom can keep supporting record profits.

Despite Thursday's decline, the KOSPI remains near record territory after a rally driven largely by semiconductor stocks.

_This article is for information only and does not constitute financial advice._