"Yesterday it was Samsung Electronics, today it is SK hynix"...Brokerages say the KOSPI could reach 12,600

[Financial News] As Micron's strong earnings sparked another semiconductor-led rally in the domestic stock market, brokerages are also raising their KOSPI targets one after another. If the semiconductor industry improves and companies continue to upgrade earnings, the market could move beyond a simple liquidity-driven rally and enter a profit-led uptrend, they said.
According to the Korea Exchange (KRX) on the 26th, the KOSPI closed on the 25th at 8,930.30, up 5.42 percent from the previous session. Samsung Electronics rose 5.29 percent and SK hynix jumped 13.06 percent, driving the index higher. In contrast, the KOSDAQ (Korean Securities Dealers Automated Quotations) fell 2.36 percent to 887.81, slipping below the 900 level and highlighting a sharper divide between semiconductor heavyweights and growth stocks.
The rally began with Micron in the United States. After reporting earnings and guidance that beat market expectations, Micron also pointed to improved profitability through expanded long-term supply agreements (SCA), sending its shares sharply higher in after-hours trading. Expectations for a better memory-chip cycle then spread to domestic semiconductor stocks, and SK hynix posted a larger gain than Samsung Electronics, helped by expectations for an American Depositary Receipt (ADR) issuance.
Kim Seok-hwan, a researcher at Mirae Asset Securities, said, "Samsung Electronics led the rally the day before, and SK hynix took over as the leading stock today." He added, "This is not a phenomenon limited to Korea. It is spreading into a 'semiconductor three kingdoms' pattern, with semiconductor sectors in Korea, Japan and China all showing strength at the same time."
Brokerages do not expect the latest semiconductor rally to be a short-term event. Samsung Securities raised its upper-end KOSPI forecast for this year from 11,000 to 12,600, citing stronger earnings momentum and a simultaneous revaluation of corporate value.
Yang Il-woo, head of the Global Investment Strategy Team at Samsung Securities, said, "Korean companies are likely to keep their earnings momentum in the second half as well." He added, "The earnings upgrade trend that briefly slowed in June is expected to strengthen again from the third and fourth quarters." He explained, "The current consensus for third- and fourth-quarter operating profit in the semiconductor sector is at a level that can be achieved even if semiconductor prices barely rise. If prices continue to increase, earnings forecasts are likely to be revised up further."
Samsung Securities also identified IT and finance as the sectors with the strongest earnings momentum in global markets. Premiums that had previously been concentrated in software companies are shifting toward IT hardware as investment in AI infrastructure expands, and the valuation discount on the semiconductor sector is expected to narrow gradually.
Yang said, "This is a period in which the valuation discount on IT hardware is likely to narrow as general-purpose AI spreads." He added, "An investment strategy centered on the AI-related value chain remains valid." He also noted, "As the year-end approaches, it will be necessary to pay greater attention to financial and domestic-demand sectors, supported by nominal GDP growth."
Still, he warned that investors should remain cautious about the possibility of greater volatility. Yang said, "Recently, the KOSPI has been moving with about four times the sensitivity of the S&P 500." He added, "High volatility driven by global macroeconomic variables could continue in the second half, so investors need to respond quickly to market changes."
dschoi@fnnews.com Choi Du-seon Reporter