Kim Byeong-yeon, a research fellow at NH Investment & Securities' research center, speaks at a press briefing held Monday at the Korea Exchange's Seoul office in Yeouido. [Song Ha-jun]
Kim Byeong-yeon, a research fellow at NH Investment & Securities' research center, speaks at a press briefing held Monday at the Korea Exchange's Seoul office in Yeouido. [Song Ha-jun]

NH Investment & Securities has set 6,000 as the floor for the recently tumbled Kospi, arguing that a cluster of headwinds — semiconductor peak-out fears, Middle East geopolitical risk and intensifying Chinese AI competition — have already been priced in over a short period, making a gradual recovery more likely than further declines.

Kim Byeong-yeon, a research fellow at NH Investment & Securities' research center, said at a press briefing held Monday at the Korea Exchange in Yeouido, Seoul, that "assuming SK hynix does not swing back to a loss the way it once did, a forward price-to-book ratio of around 1.3 to 1.4 times is the appropriate floor," adding that "translating that into Kospi terms gives roughly 6,000 points."

"This is not to say the index will fall another 10 percent from here — it means that even after pricing in every negative and every crisis scenario, the floor is 6,000," Kim said. "Rather than staying at that level for long, the market should work through a price correction and then recover to the low-to-mid 7,000s."

He added that next week's big-tech earnings would be key to judging whether revenue growth remains solid, and that the market should gradually recover despite capital expenditure concerns. He cautioned, however, that "realistically, once the index moves above the mid-8,000s, the urge to take profits could grow considerably."

Kim described the 6,000 level as a "rock bottom" — a price zone where the potential for further declines is limited even amid significant headwinds.

The Kospi breached 9,000 intraday for the first time in history on June 18 before tumbling sharply as semiconductor peak-out concerns and Middle East geopolitical risks converged. The index was pushed below 7,000 in just 17 trading sessions, and was trading in the 6,600s Monday morning. The Kosdaq also slid to the 750s.

Kim said the market was placing excessive weight on a slowdown in semiconductor export growth. "Growth rates may decelerate, but the absolute value of export volumes is in a completely different league from the past," he said. "Expanded AI investment and long-term supply contracts have also significantly reduced the volatility of semiconductor earnings compared with before." He added that it is difficult to apply the old cycle in which chipmakers swung back into the red.

Kim also said the earnings power of Kospi-listed companies has fundamentally changed. "Kospi net profit is expected to grow from 217 trillion won ($146 billion) in 2025 to 759 trillion won this year and reach 1,000 trillion won next year," he said. "Even if the rate of profit growth slows, the probability that the absolute level of earnings reverts to past levels is low."

He pushed back on concerns about a slowdown in AI investment. "AI is ultimately a market-share competition, and it is difficult for big-tech companies to cut investment simply because of short-term financial pressure," Kim said. "The moment they reduce investment, they risk losing competitiveness — so even if the financial burden grows over the next one to two years, the likelihood of a major shift in the investment stance is low."

He added that while AI models are focusing on token efficiency, the external processing units used to reduce the burden on HBM ultimately rely on CPUs. "Legacy memory sits alongside CPUs, so memory demand will continue to grow as a result," he said.

Kim said the most important thing to watch in next week's US big-tech earnings would be whether cloud sales growth holds up. "If the AI investment stance is confirmed, the current phase of excessive correction is likely to gradually stabilize," he said.

He also assessed the risk of a further sharp drop as limited from a supply-and-demand perspective. "There are concerns about market flows, but flows are in fact a lagging indicator," Kim said. "Customer deposits still stand at 100 trillion won, and as brokerages have raised margin requirements, the margin balance relative to market capitalization is only around 0.5 percent."

On foreign investor flows, he said foreigners "have been consistently selling as the semiconductor earnings cycle rose," and that "they sold more aggressively this time because the cycle climbed higher — but given that a substantial portion of the selling has already taken place, foreign selling is likely to taper off."

For the Kosdaq, Kim forecast that conditions for a normalization would emerge from September onward. "Tightened delisting requirements are already in effect, and the related regime will kick in during August and September," he said. "With the sale of the National Growth Fund and the release of a tax reform plan also scheduled, I believe the Kosdaq will start gaining momentum and entering a normalization process around September."


hajun825@heraldcorp.com