"Semiconductor Stocks Have 61% Upside Potential... KOSPI Could Jump to 5,600"

Hana Securities raised its upper target for the KOSPI to 5,600 on January 8. While concerns about overheating have been raised due to the recent rapid surge in the index, the company analyzed that there is still room for further growth, given the profit momentum in the semiconductor sector.

Currently, the KOSPI’s market capitalization stands at approximately 3,647 trillion won, up about 74% compared to the end of November last year. During this period, the increase in KOSPI market capitalization was driven by Samsung Electronics (46%) and SK Hynix (28%), and experts widely agree that the stock prices of both companies are overheating.

Lee Jaeman, a researcher at Hana Securities, stated, “The 20-day and 60-day divergence rates for Samsung Electronics stock are at their highest since 2024, and for SK Hynix, the 20-day divergence rate is at a record high.” He added, “The earnings releases for both companies this month, as well as the possibility of the US Federal Reserve maintaining its benchmark interest rate, could provide an opportunity for short-term profit-taking.” Samsung Electronics will announce its preliminary fourth-quarter results today, and SK Hynix will do so on the 21st. The US Federal Open Market Committee (FOMC) is scheduled to meet from the 27th to the 38th of this month.

However, from a medium- to long-term perspective, the semiconductor sector is expected to continue driving the index. This is because the profit growth rates and scale of Samsung Electronics and SK Hynix-the “one-two punch” of semiconductors-are overwhelming. The projected net profit growth rates for Samsung Electronics and SK Hynix in 2026 are 114% and 75%, respectively, surpassing the KOSPI’s 48%.

Lee explained, “This semiconductor profit cycle is expected to see profit growth for three consecutive years through 2026, reaching all-time highs.” He continued, “The expected stock return for semiconductors in 2026 compared to 2024 is 204%, and after subtracting the gains already achieved, there is an additional 61% upside potential for semiconductor stocks.” He further noted, “Given that semiconductors account for 38% of the KOSPI’s market capitalization, the potential for the KOSPI to rise based on semiconductors is 23% (61%*0.38),” suggesting an upper target of 5,600 for the KOSPI.

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