"KOSPI Overcomes War Fears, Poised to Surpass 8,000... Bullish Outlook for Stock Prices"

Rising Hopes for "Eight-Thousand-Pi" on Valuation Recovery
Semiconductor Performance and AI Demand Driving the Rally

There is a growing consensus that the KOSPI, which has continued its recent upward trend, could not only surpass the 7,000 mark but also reach the 8,000 level. The atmosphere is becoming increasingly optimistic, with global investment banks (IBs) successively raising their targets, fueling expectations for the so-called “Palcheonpi” (8,000 KOSPI).

According to the Korea Exchange on April 25, the KOSPI closed at 6,475.63 on the previous day, down 0.18 points from the day before. The index had once slipped to the 5,000 level amid uncertainty caused by the Middle East crisis, but as optimism about peace negotiations grew, it surpassed the 6,500 mark for the first time ever on April 23.

On the 23rd, when the three major New York stock indexes closed higher amid optimism about the resumption of peace talks between the U.S. and Iran, the KOSPI also surpassed the 6550 mark during the session, setting a new all-time high. At the Hana Bank headquarters dealing room in Jung-gu, Seoul, an employee is monitoring the stock market and exchange rates. Photo by Jo Yongjun

Earnings Outweigh War Risks... Semiconductors Lead the Rise

The market’s focus is shifting beyond war risks to the earnings performance of domestic companies, especially those in the semiconductor sector. Recently, the index has maintained an upward trajectory, supported by foreign buying and expectations of a recovery in the semiconductor industry.

In the first quarter of this year, Samsung Electronics posted consolidated sales of 133 trillion won and operating profit of 57.2 trillion won, surging by 68% and 755%, respectively, compared to the same period last year. SK hynix also set a record with its highest-ever consolidated sales and operating profit for the first quarter, at 52.6 trillion won and 37.6 trillion won, respectively.

Global IBs have been issuing optimistic forecasts one after another. Goldman Sachs raised its 12-month KOSPI target from 7,000 to 8,000, citing that the pace of corporate profit growth, especially in semiconductors, is far exceeding expectations. JP Morgan set its base scenario at 7,000 but projected that the index could reach up to 8,500 in a bull market, while Nomura Securities also raised its upper estimate to the 7,500–8,000 range.

"Still Undervalued... Further Inflows Possible"

As the memory semiconductor supercycle driven by expanded investment in artificial intelligence (AI) gets underway, profit estimates for Korean companies are being rapidly revised upward. There is market speculation that the overall profit growth rate for KOSPI-listed companies this year could significantly surpass previous forecasts. Notably, profit improvement is spreading not only among major semiconductor stocks like Samsung Electronics and SK hynix, but also across industrials and financials.

The KOSPI’s valuation remains attractive. Timothy Moe, Asia Pacific strategist at Goldman Sachs, stated, “This month, the KOSPI’s forward price-to-earnings ratio (PER) stands at about 7.5 times, which is still undervalued compared to historical averages. Considering that the average PER when the KOSPI reached previous peaks was around 10 times, there is still room for further valuation gains.”

Moe added, “Korea’s weighting in global and emerging market funds is still underweight, indicating that there is room for additional capital inflows in the future.”

This content was produced with the assistance of AI translation services.