Daesin Securities stated in a July 6 report that recent fears surrounding AI and semiconductor sectors were largely baseless. The brokerage forecast that strong Q2 earnings and upward revisions from Q3 onward will drive the KOSPI index toward the 10,000 level. Analyst Lee Kyung-min noted that the current 12-month forward price-to-earnings ratio of 9x alone enables entry to the 10,000 range, with a target of 11,500 points achievable during the third quarter. The assessment came after the KOSPI 7300 level—representing a forward PER of 6.32x, near the financial crisis low of 6.27x—provided support and established a foundation for a renewed upward trend.
Daesin Securities Forecasts KOSPI 10,000 Entry on Valuation Support
Lee Kyung-min stated that the KOSPI 7300 level represented a forward price-to-earnings ratio of 6.32x, approaching the financial crisis low of 6.27x and marking an extreme undervaluation zone. The analyst assessed that the index secured support at this meaningful level and established a foundation to resume a full-scale upward trend. The report projected that upward earnings revisions will increase upward pressure on the KOSPI and expand its upside potential, with a target of 11,500 points expected to be reached during the third quarter.
Oil Prices and Inflation Trends Support Global Equities
The report stated that international oil prices falling below $70 per barrel will lead to slower consumer price index and personal consumption expenditure inflation readings for June and July. Lee noted this will translate into downward stabilization of bond yields and the US dollar, providing momentum to global equities and the KOSPI's upward trajectory. In the first week of July (closing prices as of July 3), global equities broadly closed higher. US June non-farm payroll growth came in at 57,000, significantly below market expectations, easing Federal Reserve tightening concerns. The Eurozone's June year-over-year CPI registered 2.8%, undershooting both forecasts and the prior month's figure, strengthening risk-on sentiment.
Q2 Earnings Season to Begin Mid-July
Lee stated that the second-quarter earnings season will begin in earnest in mid-July, with upward earnings revisions expected to support a resumption and strengthening of the upward trend. The analyst noted that semiconductor price growth rates, Micron's third-quarter results, and expectations for Korean semiconductor earnings relative to export momentum remain low. Samsung Electronics' results may come in below market consensus due to incentive costs, but excluding those expenses, an earnings surprise is possible. The report assessed that semiconductor price trends, Micron's performance, and export data support a positive outlook for Korean semiconductor sector earnings.
Semiconductor Sector Negative News Assessed as Non-Material
Regarding recent negative news affecting the semiconductor sector, Lee stated that Meta's cloud business review was already disclosed in May, and Meta continues to proceed with capital expenditures and AI infrastructure buildout. The analyst assessed that Apple's adoption of Chinese-made memory is unlikely to become a realistic alternative given demand response requirements and political uncertainties. The report noted that the government's three mega-projects, large-scale semiconductor and AI data center investment plans by Samsung Electronics and SK Hynix, Samsung's collaboration with Anthropic, and expectations for third-quarter DRAM price increases support medium- to long-term semiconductor demand and profitability, acting as upward pressure on stock prices.
FAQ
What is Daesin Securities' target for the KOSPI index?
Daesin Securities set a KOSPI target of 11,500 points, which analyst Lee Kyung-min stated is expected to be reached during the third quarter. The forecast is based on the current 12-month forward price-to-earnings ratio of 9x and anticipated upward earnings revisions from the second quarter onward.
Why did Daesin Securities assess recent AI and semiconductor sector fears as baseless?
The report stated that concerns around Meta's cloud review were already disclosed in May and Apple's Chinese memory adoption faces practical and political obstacles. Lee noted that government mega-projects, Samsung and SK Hynix investment plans, and third-quarter DRAM price increase expectations support the sector's medium- to long-term outlook, countering recent negative sentiment.
What external factors does Daesin Securities expect to support the KOSPI's upward trend?
The report stated that oil prices below $70 per barrel will lead to slower June and July inflation readings for consumer price index and personal consumption expenditure metrics. Lee noted this will result in downward stabilization of bond yields and the US dollar, providing momentum to global equities and the KOSPI.
