KOSPI Hits 5,500... "6,000-Level Now in Sight"

Samsung Electronics hits all-time high, becomes "180,000 Samsung Electronics"
"Semiconductor two-top to drive index higher"

On the 13th, at the dealing room of Hana Bank's headquarters in Seoul, an employee is monitoring the stock market and exchange rates as the KOSPI breached the 5,550 level intraday and remained in a narrow range. The KOSPI opened at 5,513.7, down 0.16% from the previous session, and recorded an all-time high of 5,558.82 as of 10 minutes after the market opened. 226.2.13 Reporter Cho Yongjun

With the KOSPI breaking through the 5,500-point mark for the first time in its history, expectations are growing for it to reach 6,000 points. Experts forecast that Samsung Electronics and SK Hynix will drive further gains in the KOSPI index as demand for memory semiconductors continues to surge amid the artificial intelligence (AI) revolution. Some even suggest that not only 6,000 points but also 7,000 points may be within reach.

KOSPI breaks through 5,500 points for the first time ever

On February 13, the KOSPI opened at 5,513.71, down 0.16% from the previous trading day. It quickly rebounded after the open and at one point during the session hit an all-time intraday high of 5,558.82, but then retreated and, as of 9:46 a.m., was trading at 5,509.51, down 0.26% from the previous close.

Samsung Electronics has been the company lifting the KOSPI recently. On this day as well, Samsung Electronics rose by more than 1%, breaking through 180,000 won for the first time. The stock has climbed for six consecutive trading days since February 6, earning the nickname "180,000 Samsung Electronics." Its market capitalization reached 1,071 trillion won. The market cap of Samsung Electronics alone far exceeded the entire KOSDAQ market cap of 600 trillion won. Samsung Electronics accounted for as much as 28.2% of the KOSPI’s total market capitalization of 4,500 trillion won.

The previous day, the KOSPI closed at 5,522.27, up 3.13%, surpassing the 5,500-point level for the first time. Semiconductors led the rally. Samsung Electronics jumped 6.44% the previous day to close at 178,600 won. SK Hynix, the second-largest company by market capitalization, also rose 3.26%, contributing to the index’s advance.

Samsung Electronics and SK Hynix have recently benefited from a rally in Micron’s share price on the New York stock market, driven by expectations of stronger demand for memory semiconductors. The market expects that large-scale AI investments by major IT companies will significantly boost the earnings of memory semiconductor makers.

Despite a decline in the New York stock market on February 12 (local time), Micron gained around 2%, extending its upward trend as optimism continued. Micron Chief Financial Officer (CFO) Mark Murphy said at an investor conference the previous day that he expects the memory semiconductor market to "remain tight this year and beyond."

Stock market experts believe that as favorable conditions persist in the memory semiconductor industry, the KOSPI will be fully capable of reaching the 6,000-point level. Lee Hyosup, research fellow at the Korea Capital Market Institute, said, "Expectations for semiconductor earnings have triggered a strong rally in the KOSPI, and the fact that both foreign investors and institutional investors have been net buyers suggests there is ample room for further gains," adding, "There had been a market consensus that heavy profit-taking would emerge once the KOSPI crossed 5,000, which would mean it would take some time to reach 5,500, but those concerns have now been dispelled."

Kim Yonggu, researcher at Yuanta Securities, said, "A series of upward revisions to earnings expectations for the one-two punch of Samsung Electronics and SK Hynix in semiconductors will further push up the KOSPI index," explaining, "The estimate for Samsung Electronics’ operating profit this year, which was only 46 trillion won as of last September, has now surged to 167 trillion won, and SK Hynix’s estimate has risen from 48 trillion won to 146 trillion won over the same period." Kim added, "I am raising this year’s KOSPI target from the previous 5,200 points to 6,300 points."

The trading floor of a securities firm in Seoul

Samsung Electronics and SK Hynix, the semiconductor two-top, expected to lead the market rally

Many also argue that a challenge beyond 6,000 toward 7,000 points is achievable. Previously, foreign investment bank (IB) JPMorgan set a KOSPI target of 7,500 points, Citi projected 7,000 points, and domestically, NH Investment & Securities raised its target to 7,300 points. JPMorgan expects that sustained strong demand for memory semiconductors will allow Samsung Electronics and SK Hynix to continue leading the KOSPI’s advance.

Kim Byoungyeon, Head of Investment Strategy at NH Investment & Securities, said, "The KOSPI is currently in an expansion phase where corporate earnings growth and valuation expansion are occurring simultaneously," analyzing that "AI demand is underpinning expectations for earnings improvement, while qualitative improvements in corporate governance are driving a re-rating of valuation multiples."

Han Jiyoung, researcher at Kiwoom Securities, said, "Given that Korea’s 12-month forward net profit growth rate (year-on-year) remains on an upward trend, the Korean stock market has a relative earnings momentum advantage over other markets," adding, "I do not expect the medium-term upward trend in the market to be easily undermined."

Kim Hakgyun, head of research at Shinyoung Securities, said, "Although stock prices have risen significantly, the valuation of our market is still not much higher than that of other countries and should instead be viewed as undervalued," adding, "There has been no change significant enough to conclude that the existing upward trend has reversed." He continued, "If a correction does occur, it is more likely to be triggered not by internal factors in our market but by a rise in U.S. interest rates, which would lead to a correction in the U.S. market and, in turn, a correction in the KOSPI."