Even KOSPI 6,000 Is Not High Enough... Research Heads Say "‘Chilcheonpi’ Is Also Within Reach"

[The Financial News] As the Korea Composite Stock Price Index (KOSPI) closed above 6,000 for the first time in history, optimism is spreading across the securities industry. Buoyed by expectations of stronger earnings in the semiconductor sector and supportive government policies, some now argue that "Chilcheonpi," a colloquial term for KOSPI 7,000, may not be far off.
On the 25th, The Financial News surveyed the heads of research centers at five brokerages—Hana Securities, NH Investment & Securities, Kiwoom Securities, Korea Investment & Securities, and Yuanta Securities Korea—on their stock market outlook. All of them raised the upper end of their expected KOSPI trading band to the 7,000 level. The most bullish forecast came from Hana Securities, which set the top of its band at 7,900. It was followed by NH Investment & Securities and Kiwoom Securities at 7,300, Korea Investment & Securities at 7,250, and Yuanta Securities Korea at 7,100.
They also left room for further upward revisions to the band in line with corporate earnings growth. Hwang Seung-taek, head of the research center at Hana Securities, said, "The KOSPI is likely to maintain its upward trajectory. Depending on how much corporate earnings improve, we may raise the band again," adding, "However, uncertainties stemming from Donald Trump, such as tariffs and the Iran issue, could act as variables." Jonghyung Lee, head of the research center at Kiwoom Securities, also noted, "The price-to-earnings ratio (PER) is only in the low 10 times range, which is merely around the historical average, so valuation pressure remains low," and advised, "As long as the trend of upward revisions to operating-profit consensus, led by semiconductors, continues, it is appropriate to assume the market’s direction is to the upside."
Rising expectations for earnings at Samsung Electronics and SK hynix driven by the spread of artificial intelligence (AI), along with stronger shareholder-return policies following amendments to the Commercial Act of the Republic of Korea, are also reinforcing the bullish view on the index. Choi Hyun-jae, head of the research center at Yuanta Securities Korea, commented, "Starting with a break above 6,000 in the first quarter, the KOSPI will likely follow an upward-sloping path, settling into the 6,000 range through the second and third quarters," and added, "If earnings expectations for large-cap semiconductor names such as Samsung Electronics and SK hynix continue to be revised upward, we can fully consider raising the index band further."
Cho Suhong, head of research at NH Investment & Securities, stated, "Last year’s amendment to the Commercial Act of the Republic of Korea laid the groundwork for improving corporate governance issues," and continued, "The period when these changes become visible will be the shareholders’ meeting season next month, when we may see opportunities to resolve the so-called ‘Korea discount’ through shifts in corporate and shareholder behavior."
The research heads again picked semiconductors as the leading sector this year, as they did last year, while also stressing the need to pay attention to shipbuilding, defense, nuclear power, biotechnology, and securities stocks.
Yoo Jong-woo, head of the research center at Korea Investment & Securities, explained, "Following High Bandwidth Memory (HBM), prices of standard DRAM and NAND Flash Memory are also continuing to rise, so investors should maintain their semiconductor exposure while increasing allocations to other promising sectors," adding, "Investors should also look at growth names such as robotics, biotech, and shipbuilding, as well as securities stocks, where earnings are showing signs of improvement."
For the relatively sluggish KOSDAQ market, the prevailing view is that it will also trend higher, supported by government measures to revitalize the market and increased capital inflows.
Yoo said, "Secondary-battery stocks, which have a large weight within the KOSDAQ, have weak share-price momentum due to the downturn in the electric-vehicle industry, so investors need to take a stock-picking approach," and predicted, "Unlike the KOSPI, the KOSDAQ carries a heavier burden of margin financing, which could act as a cap on the upside for share prices." Choi added, "For the index to break through its upper range in a sustained way, there must be qualitative improvements in fundamentals, such as successful licensing-out (LO) deals by top market-cap biotech new-drug developers on the KOSDAQ, or a dramatic turnaround in the secondary-battery industry," and advised, "Investors should selectively respond by focusing on stocks that combine solid earnings momentum with strong demand from foreign and institutional investors."
jisseo@fnnews.com Minji Seo, Han-geul Bae Reporter