Goldman Sachs: "KOSPI Composite Index to Reach 12,000"

[Financial News] Goldman Sachs maintained its KOSPI Composite Index target, stating that "the earnings cycle of Korean memory semiconductor companies is being undervalued."
According to U.S. media reports on the 7th, Tim Moe, Goldman Sachs' Chief Equity Strategist for Asia-Pacific, stated in an interview on the 4th, "We are still maintaining that position. This is based on the judgment that earnings will support it." In this regard, he had previously raised the KOSPI Composite Index target from 9,000 to 12,000 in early June, and maintained the target early last month, characterizing the decline in June as a "steep correction within a major bull market."
Moe argued that "the market is underestimating the duration of this earnings cycle." He stated that "the memory supply shortage caused by data center competition will worsen next year," and estimated that "the scale of capital expenditures by U.S. Big Tech next year will be raised from the previous forecast of $800 billion to $1.2 trillion."
He added, "Hyperscalers are in a situation where they must continue spending even if they do not make money," and said, "This is good for memory because it will drive computing demand that requires a lot of memory."
Moe estimated the earnings growth rate of KOSPI Composite Index companies this year at approximately 360%, projecting it would slow to 35% next year. He explained that the KOSPI Composite Index target is based on a 12-month forward earnings multiple of 7.5 times, whereas the index is currently trading at 5.3 times, which is roughly half the 7-year average. He added that if Korean companies achieve his earnings forecasts, the target of 12,000 for the KOSPI Composite Index would not seem unreasonable.
He predicted, "While acknowledging risks from competitors such as China's Changxin Memory (CMXT) and the possibility of political backlash against the expansion of U.S. data center construction, fundamentals will still work in favor of high-tech memory semiconductor companies for the next few years."
[email protected] Hong Chae-wan Reporter