Koo Hee-jin, Senior Analyst, LG Investment & Securities

If you compare investment strategy in the electronic field to a baseball game, now is the right time for you to hold your bat long and swing it hard. The situation could also be compared to the last hitter at the end of ninth inning and the score is tied at 0 to 0. Although the game is in a tie, it is still necessary for you to aim a long hit so that you can conclude the game in a satisfactory manner. There are three good reasons why you should follow the above advice in regard to IT stocks in 2005. Firstly, it is estimated that the fourth quarter reports for 2004 will be on the low end of the scale. But if you analyze the movement of sales prices and the volume of forwarding by electronic companies in the first two months of 2005, there will be a noticeable improvement compared to the fourth quarter of 2004 in spite of the soaring value of the won. As long as the electronics industry has a short business cycle compared to other industries and large fluctuations, it would be possible to make greater gains by following the strategy, "purchase when price/earnings ratios are high and sell when they are low". Secondly, it is forecasted that there will be a revaluation of the growth of Korean electronics industry in the stock market during 2005. At the beginning of 2000, the Korean electronics industry achieved not only quantitative growth such as gains in market share, etc. but also qualitative growth by, for example, developing the availability of raw materials. The yearly net profit of Samsung Electronics, which has grown to be the world's largest electronics company, has already broken through the $10-billion level, while the net profit of LG Electronics is being forecasted to exceed that of Sony Electronics. It is also forecasted that LG Electronics will achieve even better profit gains in 2005 compared to many other foreign electronic companies. In addition to investment in R&D boosting market share, however indirectly, electronics companies have also achieved the additional development of technology that increases positive results in such areas as enhanced efficiency in manufacturing, investment decision making. However, there is concern when analysts suddenly change the target price of shares without any apparent reason. Thirdly, Korean electronic companies are engaged in intensive research and investment in regard to next-generation products such as D-Ram, TFT-LCD, Internet Phones, Flash Memory and Digital TV. Therefore, it is anticipated that Korean electronic companies will be able to ask a premium on the world market because of preparations being done in regard to future potential growth, and the impact of such preparations on the valuation of the electronics industry. There are still negative factors out there such as exchange fluctuations, and the possible revaluation of the Chinese currency. Nevertheless, it is recommended that investors try to look at the big picture and pursue the larger, long-term profits rather than seek short-term gains given the phenomenal progress of the industry and its highly competitive position in world markets today.