BNK: “Fair KOSPI Level Is 6,390” ... 1,100 Points Above the Close on the 13th

[Financial News] BNK Investment & Securities forecast a fair KOSPI level of 6,390 based on October exports. That is about 1,100 points above the closing level of 5,290.53 on the 13th.
BNK Investment & Securities judged that the KOSPI was in undervalued territory. With earnings concentrated in semiconductors, foreign selling and outflows from equity funds continuing, it expected the market to remain range-bound for the time being.
In a report on the 14th, Kim Seong-no, a researcher at BNK Investment & Securities, calculated a fair KOSPI level of 6,390 based on October exports of 154 trillion won in Korean-won terms.
That is down from 6,700 based on September exports, but still 20.8% above the closing level on the 13th. Researcher Kim also said the KOSPI’s price-to-earnings ratio (PER) was low compared with the past.
On the 13th, the KOSPI rose more than 3% early in the session, breaking above the 5,500 level. After foreign investors turned net sellers, the index gave up all its gains and closed at 5,290.53, down 0.98% from the previous trading day.
The concentration of earnings in semiconductors stood out in corporate results. Based on results from 180 KOSPI 200 companies that had reported earnings, BNK Investment & Securities estimated third-quarter KOSPI 200 operating profit at 263.5 trillion won, up 6.5% from the previous quarter. Samsung Electronics, SK hynix and SK Square accounted for 75.4% of total operating profit. Operating profit excluding those three companies was estimated to have fallen by 13.3 trillion won from the previous quarter.
Third-quarter net income attributable to controlling shareholders of KOSPI 200 companies was estimated at 163.5 trillion won, down 31.1% from the previous quarter. BNK Investment & Securities said foreign-exchange-related losses and losses on the valuation of investment assets had weighed on net income. It considered it highly likely that the forecast for this year’s KOSPI 200 net income attributable to controlling shareholders would fall to the low 700-trillion-won range if companies recognized one-off costs at year-end, even if semiconductor operating profit increased in the fourth quarter.
Researcher Kim pointed to foreign selling, outflows from equity funds and a decline in investor deposits, saying, “There is currently no catalyst on the supply-and-demand front to resolve the undervaluation.” He added, “We expect the market to remain range-bound within a limited range for the time being.”
[email protected] Lee Jeong-hwa Reporter