Goldman Sachs Maintains KOSPI 12,000 Target Despite Market Slump... The Basis for "SK Hynix at 4.7 Million Won"

Goldman Sachs has maintained its KOSPI target of 12,000, assessing that the earnings cycle duration of South Korean memory semiconductor companies is being underestimated.

Bloomberg reported that Timothy Moe, Chief Asia-Pacific Equity Strategist at Goldman Sachs, stated, "We are still maintaining our KOSPI outlook presented last June, based on the judgment that earnings will be supported."

Earlier in early June, he raised the KOSPI target from 9,000 to 12,000, and in early August, he characterized the June drop as a steep correction within a major bull market, maintaining his target.

He forecasted that memory supply shortages caused by data center competition will deepen even further next year.

He also projected that the capital expenditure scale of U.S. big tech companies next year will 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 are not making money," adding, "This is good for memory because it drives computing demand that requires a massive amount of memory."

He argued that if South Korean companies achieve their earnings forecasts, the KOSPI 12,000 target "will not look absurd."

Expectations for a re-evaluation are also following in the securities industry regarding the stock prices of Samsung Electronics and SK Hynix, which have plunged sharply from their peaks.

The stock prices have fallen to around 3 times their price-to-earnings ratio based on projected earnings for 2027, but the outlook suggests that next year's expansion of artificial intelligence investments could lead to shortages where memory supply fails to keep up with demand.

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

Nomura also stated on the 4th that the two companies have entered an area of extreme undervaluation, maintaining its buy ratings while keeping the target prices for Samsung Electronics and SK Hynix at 670,000 won and 4.7 million won, respectively.

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

While maintaining a positive outlook on the KOSPI for the time being, including the two companies, Goldman Sachs picked risks from competitors such as China's Changxin Memory 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 Lee Su-min | Produced by SBS Digital News)
※ Please note: This article was translated by AI and may contain errors.