Hello, this is Han Gyun-soo's Weekly Insight. Let's kick off this week with energy. Since Monday, Tuesday, and Wednesday were holidays, there were only two trading days this week. I thought there wouldn't be much to discuss, but a lot has happened, so let's quickly review the key points. This week's Weekly Insight starts off strongly.

There are several key topics this week, but I'll highlight the most important ones. First, the FOMC has finally started to lower interest rates after four years and six months. The last time there was a rate cut was in early 2020, so it has indeed been over four years. The Fed's pivot signifies a change in policy stance; previously, they maintained high interest rates. Finally, this month, they have begun to lower rates, and this won't be a one-time cut. A trend of gradual, stepwise rate reductions will continue for the time being.

In this instance, instead of lowering the rate by 25 basis points, or 0.25%, the Federal Reserve implemented a significant cut of 50 basis points, or 0.5%, all at once, leading to a rapid decrease in interest rates. The reasons for the Federal Reserve's decision to lower the benchmark interest rate are various, but recently, the two most important factors they are focusing on are employment and inflation. The central bank, under Chairman Powell, previously emphasized controlling inflation due to high prices. However, now that inflation seems to be under control and the unemployment rate is fluctuating, discussions related to employment indicators have been prominent for several months. The key point here is not whether the benchmark interest rate is lowered or not, but whether the employment and inflation indicators are moving in a way that the Federal Reserve cannot manage, or if they are operating outside the range of what can be handled.

I need to look at this, but since the prices are high, it can be said that they have stabilized. The employment indicators seem a bit erratic, but in reality, as the unemployment rate rises sharply, people are starting to lose their jobs at a rapid pace. The Federal Reserve is not just lowering interest rates; it has a more proactive character in its rate cuts. In other words, once the employment market starts to shift, meaning the unemployment rate begins to rise, the effectiveness of interest rate cuts may diminish or there may be a possibility of the unemployment rate rising. Therefore, the proactive nature of the rate cuts means that, from an investor's perspective, this is not a major issue to be overly concerned about. It is difficult to find a precise correlation between interest rate cuts leading to stock market increases or interest rate hikes leading to declines. What is more important is the reasoning behind the rate cuts and hikes. In my view, the recent cuts are more about precaution and proactivity.

Since the personality is somewhat strong, it is unlikely to have a significant impact on the market. In other words, just because interest rates are lowered does not mean that the economy will be in a recession to the extent that one would sell stocks. Additionally, liquidity is expected to increase significantly, so the idea is not to rapidly lower interest rates and then invest all at once in stocks; this stance is not extreme. It can be viewed as a situation where one can simply continue on the original path without any drastic changes. While there may not be a significant correlation between the overall index and interest rates, there is indeed a relationship by sector. For example, sectors like biotech that are typically sensitive to interest rate cuts are reacting first as these cuts begin. Therefore, it is difficult to say that the market itself is directly impacted in a significant way. Of course, there is an influence, but the effect of lowering interest rates does not guarantee that stock prices will necessarily...

There isn't a clear correlation that if interest rates rise, the market will necessarily decline. However, historically, when looking at various sectors, we can interpret that there are indeed some effects. This discussion pertains to the United States, and now if we talk about South Korea, the key topic is the financial investment firms. As everyone knows, the financial investment deadline is next Tuesday, the 24th. So, based on the 24th, right after the discussion ends, the Democratic Party will likely make a strong announcement regarding their party stance. Currently, the possibility of public opinion shifting is high. Therefore, it would be good to check this aspect. There are various types of interest rate and liquidity setters. As mentioned earlier, there are sectors like bio, renewable energy, and automobiles, and broadly speaking, construction and many others. The important thing is the strength of the liquidity.

There are, of course, some companies that receive a lot of direct investment while others receive less. The sectors that are most affected are obviously bio, renewable energy, and broadly speaking, secondary batteries and electric vehicles. Looking back over the past two to three weeks, the biggest influence has clearly been in the bio sector. The important thing is that there is continuity; we need to see continuity in the current period. If there are no additional factors aside from macro indicators, then that would be the end of it. However, the bio sector inherently has many factors driving it, and it seems reasonable to think that it will continue on its current path. I would like to summarize the stocks; our country's new drug biotech companies have significantly improved their technology over the past 10 to 20 years. In the past, they focused on anticancer drugs.

Focusing primarily on the leading companies, later on, even mid-sized companies in the field of autoimmune diseases have begun to work on biosimilars, and various other sectors have been added. As a reference, I will first organize the key players in this area, and those I do not mention today will include second-tier companies, which could be seen as smaller siblings or younger brothers following the leading ones. I will organize those later when I have time. Now, let's take a look at the companies that have recently shown some movement, focusing on the top five platform companies among small to mid-sized biotechs: Alteogen, AB Bio, Ligand, Camp Bio, and Pril Bio, as well as GI Innovation. Among these, everyone is familiar with the bispecific antibody platform, which I have discussed over 40 to 50 times. A-Bio is the leader in this area, while Alteogen is notable in the antibody-drug conjugate (ADC) platform, approximately at the level of a 3,000-person pharmaceutical company.

Recently, the keyword joint venture has gained significant prominence, particularly in the context of Regenerative Medicine. The term Regenerative Medicine can be seen as having evolved with four key changes. The platform known as Long-acting Delivery Systems refers to a technology that prolongs the duration of drug efficacy. This can be exemplified by companies like Frill Bio. 

I personally have a fondness for radioactive therapeutics, and one of the notable companies in this area is Future Chem, which focuses on prostate cancer. For autoimmune diseases, there are companies like Halo Bio. In the realm of gene editing, ToolGen can be considered a top player, especially since it holds the foundational patents. 

In the CAR-T and NK cell therapy sector, companies such as Java Biotech, CureCell, GCS, and Clone Vaxel Bio are notable. As for FDA final product approval-related stocks, Yuhan Corporation and OscoTech are among the key players.

Previously, we already received approval for laser therapy for non-small cell lung cancer, and we are expected to receive HLB's ribo-sera. In terms of biological security law, there are companies like Samsung Biologics, Viroc, and Prestige Biologics. Aside from these, there are other stocks that we need to keep an eye on, such as IMBDX, which conducts liquid biopsies to screen for eight types of cancer through our blood. IMBDX is recognized for liquid biopsy. When discussing the 3,000 major pharmaceuticals, we mentioned biosimilar formulation transformation technology. Cheondang Pharmaceutical has three main areas: first, biosimilars; second, a SPAS platform for formulation transformation; and third, it is also categorized under obesity-related stocks. This week, companies like Chaperone have been very active.

There is a company called Sharperon, which is fundamentally a treatment for atopy. Additionally, it can be associated with obesity-related topics. Then there's Curiox Biosystems, which can be considered a topic company that has automated cell analysis technology. Other cancer treatment companies, such as Voronoi, are emerging. Voronoi has reached a new high this week and can be seen as a treatment for non-small cell lung cancer. Besides this, there are actually a tremendous number of biotech companies. So, when the sector moves, it leads to really happy considerations. If we look at it from a broader perspective, there are leading companies in each part. For example, I haven't talked about stem cell therapies today because there hasn't been any movement in that area yet. This is also the case for other fields, and in the future, there will be discussions about dementia treatment and side effects.

If there is an opportunity later, I will address it. So, the stocks I mentioned should not be purchased recklessly. Of course, you should study further, and those who already own them probably know this, so think of it as a reference for holding. When the sector rally begins and the frenzy starts, the problem is that investors lose their rationality. As prices soar, they think, If I don't buy this right now, I'll miss out. This is known as the FOMO phenomenon—everyone else is making money, and I'm the only one left out, while others are profiting and rising. This can lead to irrational buying, so you need to be especially cautious about that. When the frenzy starts, instead of buying what has already risen, you should look for laggards to buy at the lows or trade the leaders with a focus on short-term trading.

Please make sure to consider various methods, such as setting a stop-loss and cutting losses firmly from below. I urge you again, as the market is proving that it is undeniably a bio sector. From this point on, we are entering a dangerous phase where emotions can easily take over, and buying large amounts at high prices can become tempting. Always make rational decisions; either buy on dips, prepare for latecomers, or wait for corrections. Most of you have likely already accumulated from the bottom, so don’t rush to sell. Wait patiently, as those who are more steadfast will ultimately make more money. I believe that a time will come when being patient will pay off significantly.

I believe that trading with a long-term perspective will be very helpful. So, let's wrap up today's weekly insight here. Please make sure to do additional research on the stocks we discussed today before making any trades. I will see you next week. You all worked hard this week, thank you for your efforts.

[위클리 인사이트] 바이오는 이런 애들만 보면 됩니다

주식전문가 한균수 채널입니다.

✉️ kyunstock@naver.com

[위클리 인사이트] 바이오는 이런 애들만 보면 됩니다

Scripts