Hana Securities analyst Lee Jae-man's May 18 report predicting a KOSPI decline when SK Hynix's market capitalization overtakes Samsung Electronics has drawn renewed attention after the forecast materialized. On June 22, SK Hynix's market cap exceeded Samsung Electronics for the first time, the same day KOSPI peaked at 9114.55, followed by a 20% drop to 7291.91 by July 9. Lee attributes the decline to semiconductor sector concentration reaching peak levels, drawing parallels to the 2000 dotcom bubble when Cisco Systems surpassed Microsoft and GE in S&P 500 market cap despite having only 28% of Microsoft's net profit. The Korean stock market has experienced significant volatility as semiconductor stocks, particularly SK Hynix and Samsung Electronics, have dominated index movements amid global AI investment trends.
Lee Jae-man Predicted KOSPI Peak Using Market Cap Comparison Signal
Lee Jae-man, head of Hana Securities' Global Investment Analysis Division, published a report on May 18 titled "KOSPI, Now Entering the 10,000-Point Era." In the report, Lee stated that "the signal for the end of the current bull market based on profit growth would be when SK Hynix's market cap, whose 2026-2027 net profit estimates are smaller than Samsung Electronics, surpasses Samsung Electronics."
Lee cited the March 2000 dotcom bubble peak as precedent, when Cisco Systems, with net profit only 28% of Microsoft's, overtook Microsoft and GE to become the number one S&P 500 stock by market cap, immediately before Nasdaq entered a full-scale decline.
The prediction proved accurate. SK Hynix's stock price continued rising after the report's publication, and on June 22, its market cap surpassed Samsung Electronics for the first time. June 22 was also the day KOSPI peaked at 9114.55. After KOSPI fell 20% to 7291.91 by July 9, investors revisited the report.
Hana Securities Analyst Identifies 7290-Point Level as Rebound Zone
Lee views the current KOSPI level as near bottom. In his July 6 report, he stated: "Since 2023, KOSPI's maximum decline from previous high to low has been -20%, and applying this to the recent high (9114 points) yields a low of 7290 points." He added: "Currently, the index is at a level where a rebound is possible, and if we consider the average 20-day disparity rate of 103.3% since 2025 as the short-term rebound level, 9240 points is possible."
KOSPI 2027 Forecast Projects 11,450-Point Upper Range
Lee presented the possibility of KOSPI exceeding the 11,000 level if a rebound occurs. In his July outlook report published on July 29, he projected that applying the average price-to-earnings ratio (PER) of 9.96 times since 2010 to the 2027 KOSPI net profit estimate (946 trillion won) would result in an upper KOSPI range of approximately 11,450 points.
Semiconductor Sector Profit Estimates Continue Rising Through 2027
Lee assessed that discussion of semiconductor sector rotation is premature. He explained that the gap in profit growth rates between stocks has not narrowed, as semiconductor net profit estimates remain intact. The expected KOSPI net profit growth rate for 2026 is 235% and 30% for 2027, which falls short of Samsung Electronics (570% and 33%) and SK Hynix (410% and 38%) during the same period.
Regarding Big Tech's AI investment reduction and semiconductor peak concerns, Lee diagnosed it as premature. He projected that Big Tech companies' year-over-year investment growth rate would increase from 81% in the first quarter to 90% in the third quarter. However, he noted: "From the third quarter of 2027, when the capital investment growth rate falls below the sales growth rate, controversy that investment is passing its peak will be highlighted."
Lee stated: "While there are concerns about US hyperscalers' investment peak passage and capital recovery, reflecting this at the present time is too early." He added: "Samsung Electronics and SK Hynix's 12-month forward operating profit estimates are rising both year-over-year and month-over-month, so we judge that excessive price adjustment has occurred for KOSPI," cautioning against current pessimism.
FAQ
What signal did Lee Jae-man identify for the KOSPI peak in his May 18 report?
Lee stated that the signal for the current bull market's end would be when SK Hynix's market cap surpasses Samsung Electronics, despite SK Hynix having smaller 2026-2027 net profit estimates than Samsung Electronics.
What is Hana Securities' KOSPI rebound target based on the July 6 analysis?
Lee's July 6 report identified 7290 points as the bottom level based on the maximum 20% decline pattern since 2023, and projected a potential short-term rebound to 9240 points using the average 20-day disparity rate of 103.3% since 2025.
How did Lee Jae-man calculate the KOSPI 11,450-point forecast for 2027?
In the July 29 report, Lee applied the average price-to-earnings ratio of 9.96 times since 2010 to the 2027 KOSPI net profit estimate of 946 trillion won to arrive at the 11,450-point upper range projection.
