[Edaily Reporter Shin Ha-yeon ] “In a bull market like this, it’s hard to imagine the leading sector shifting to sectors other than semiconductors. Given the current trend, semiconductors will experience the smallest declines during downturns and show the strongest gains during rebounds.”

As the KOSPI fluctuates between sharp declines and rebounds, market attention is shifting back to semiconductor earnings and profit estimates. Lee Jae-man, an analyst at Hana Securities—who a month ago cited SK hynix’s surpassing of SamsungElectronics’ market capitalization as a sign of a overheated bull market—stated in a phone interview with Edaily on the 24th, “Ultimately, the key lies in semiconductor profits.” His assessment is that both semiconductor profits and KOSPI earnings will continue to grow.

Rather than concluding that the previous day’s sharp decline signaled the end of the bull market, the analyst interpreted it as the result of a combination of supply-and-demand shocks and the burden of excessive concentration in the semiconductor sector. “As most of you know, yesterday’s sharp decline was largely a supply-and-demand issue,” he noted, adding, “The root causes were ETF rebalancing and excessive leverage.”

He also predicted that even after the market’s volatility, the semiconductor sector would not easily relinquish its status as the market leader. “Even if the bull market were to turn,” Lee said, “semiconductors would likely experience the smallest decline,” adding, “A strategy of buying primarily in semiconductors when prices fall appears effective.”

Earlier, the market had revisited a report titled “KOSPI: Entering the 10,000-point Era,” published by this analyst last month. At the time, the analyst noted, “Another signal that the current bull market, driven by earnings growth, is coming to an end would be if SK hynix’s market capitalization surpasses that of SamsungElectronics.” Subsequently, SK hynix’s market capitalization did indeed surpass that of SamsungElectronics on the 22nd, and the index plummeted on the following trading day, the 23rd, drawing attention to this forecast.

However, the analyst explained that the report’s focus was not on the “end of the bull market” but on “concentration and overheating.” He said, “The key point wasn’t the logic that the bull market was ending, but rather the question of whether the market would be overheated by that point,” adding, “While many people are focusing on market capitalization, the core issue was earnings.”

He also noted that the reason for mentioning SK hynix overtaking SamsungElectronics in market capitalization was that it served as a symbol of the concentration that could realistically occur. “Both companies are performing well, but the point was that the one with the larger net profit would naturally be at an advantage,” the analyst pointed out. “I viewed this as a representative example illustrating the phenomenon of market concentration toward a single stock.”

Ultimately, the outlook is that the market’s direction will be driven by semiconductor earnings and profit estimates for the foreseeable future. He identified the earnings announcements from Micron Technology, SamsungElectronics, and SK hynix as the most immediate turning points. The analyst assessed, “Whether the cooled-off sentiment toward semiconductor investments can be revived will depend on Micron Technology’s earnings.”

In particular, he viewed changes in earnings estimates for the third quarter and beyond as crucial, not just second-quarter results. “Once earnings are announced, the rate of change in third-quarter estimates will be key,” he explained, adding, “The subtle point will be not just whether results meet expectations, but which company’s estimates are revised upward the most.”

He identified operating profit margin as the key indicator to watch in semiconductor earnings. “The key question is how much the operating profit margin is improving and whether it can remain strong going forward,” the analyst explained. “Currently, the semiconductor market is seeing high operating profit margins due to rising (memory) prices and supply bottlenecks, but the crucial point is whether this high operating profit margin can be sustained.”

Regarding sector rotation within the bull market, he believed it is more likely to take the form of other sectors catching up after a semiconductor-led recovery, rather than a shift in leading sectors. The analyst said, “It’s hard to imagine the leading sectors changing much in the current bull market,” adding, “Fundamentally, the normal cycle in a bull market is for the leading sectors to rise again, bringing the index back on track, and then for other sectors to follow suit.”

He also emphasized, “Since the index has been driven by semiconductors, any sell signals will likely come from the semiconductor sector as well,” but added, “I don’t believe we’ve reached the peak yet, so I don’t plan to actively switch leading sectors as a strategy within this bull market.”

Meanwhile, according to MP Doctor, SamsungElectronics and SK hynix managed to rebound within a single day, with SamsungElectronics rising by over 10% and SK hynix by over 5% at one point this morning compared to the previous trading day. This appears to be a result of rebound buying following the previous day’s sharp declines of over 12% for both companies.