Goldman Sachs Maintains "Kospi 12,000" Target Amid Bear Market, Citing Reasons for "SK Hynix 4.7 Million Won"

Goldman Sachs has maintained its Kospi target of 12,000, assessing that the earnings cycle of South Korean memory chipmakers is being underestimated.

Bloomberg reported that Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs, stated, "We are maintaining our Kospi outlook issued in June based on the judgment that earnings will be supported."

Previously, he raised the Kospi target from 9,000 to 12,000 in early June, and in early August, he described the decline in June as a steep correction within a broader bull market, maintaining his target.

He projected that memory shortages driven by data center competition will intensify further next year.

He also expects the capital expenditure scale of U.S. big tech companies next year to be revised upward from the previous forecast of 800 billion dollars to 1.2 trillion dollars.

He explained, "Hyperscalers are in a situation where they must continue spending even if they do not make money," adding, "This is good for memory because it drives computing demand that requires massive amounts of memory."

He argued that if South Korean companies achieve his earnings forecasts, the Kospi 12,000 target "will not look unreasonable."

Expectations for a revaluation are also emerging in the securities industry regarding the stock prices of Samsung Electronics and SK Hynix, which have plunged from their peaks.

Although stock prices have fallen to around 3 times the price-to-earnings ratio based on projected earnings for 2027, the argument is that a supply shortage could occur next year where memory supply fails to keep up with demand due to expanded artificial intelligence investments.

Regarding the memory market next year, KB Securities stated, "The tightest supply environment in history will unfold," presenting the two companies as top picks in the semiconductor sector.

Nomura also stated on the 4th that the two companies have entered an extremely undervalued zone, maintaining buy ratings and target prices of 670,000 won and 4.7 million won for Samsung Electronics and SK Hynix, respectively.

However, Citigroup lowered its target prices for the two companies to 430,000 won and 3 million won, respectively, reflecting earnings pressure from a strong won.

While maintaining a generally positive outlook on the Kospi for the time being—including the two companies—Goldman Sachs cited risks from competitors such as China's ChangXin Memory Technologies (CXMT) and the possibility of political backlash against the expansion of U.S. data center construction as variables.

Reported by Jung Da-eun | Video by Ahn Jun-hyeok | Graphics by Sumin Lee | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.