"Now Is Not the Time to Dump Samsung Electronics or SK Hynix"... Goldman Sachs Raises KOSPI Target to 7,000

According to Financial News, major global investment banks (IBs) have recently said that the Korea Composite Stock Price Index (KOSPI) still has substantial upside potential, even as the domestic stock market swings sharply up and down.

On the 5th (local time), The Goldman Sachs Group, Inc. stated that the recent pullback is part of a technical correction and that the index is likely to rebound from its trading range and reach a new high. On this basis, it raised its year-end KOSPI target from 6,400 to 7,000.
The Goldman Sachs Group, Inc. explained that past geopolitical crises show a pattern in which the index tends to recover within 3 to 12 months after the initial shock.
It also lifted its forecast for Korean corporate earnings growth this year from 120% to 130%. This is the third upward revision so far this year, driven mainly by the continued rise in memory semiconductor prices.
The recent correction has pushed the 12‐month forward price-earnings ratio (PER) down to 8.8 times, which the bank viewed positively. With return on equity (ROE) running above 20%, it judged that valuations remain attractive.

The bank also projected that selling pressure from foreign investors will gradually ease. It noted that this year’s net foreign selling of 15 billion dollars (about 22 trillion won) mainly reflects profit-taking in semiconductor stocks and rebalancing by exchange-traded funds (ETF). It added that the current foreign ownership ratio of 34.5% is "not at an extreme level." The report also pointed out that margin debt held by retail investors stands at just 0.6% of total market capitalization, the lowest level in five years.
As promising sectors, it highlighted artificial intelligence (AI)–related robotics, power equipment, nuclear power, defense, and shipbuilding.
In semiconductors, SK Hynix Inc. is currently in the lead, but the investment appeal of Samsung Electronics Co., Ltd. is also becoming more pronounced, the bank assessed. Samsung Electronics has a high share of standard memory semiconductors, and investors are increasingly positive as the company shows visible progress in developing HBM4 high-bandwidth memory (HBM4). In a similar vein, JPMorgan Chase & Co. maintained its target price for Samsung Electronics at 240,000 won.
The Goldman Sachs Group, Inc. forecast that SK Hynix Inc. will remain the market leader in high-bandwidth memory (HBM) for the next several years. It also mentioned the possibility of a future listing in the U.S. stock market, saying this could serve as a catalyst for a valuation re-rating.
sms@fnnews.com Reporter Sung Min-seo Reporter