[Edaily Reporter kyoungeun kim ] Shinhan Investment Securities announced on the 31st that it projects the domestic KOSPI range for September to be between 6,600 and 8,000 points.
In a report released that day, Noh Dong-gil, an analyst at Shinhan Investment Securities, stated, “Applying an interest-rate-adjusted fair price-to-earnings (P/E) ratio of 8.5 times to the 12-month forward earnings per share (EPS) of 1,205.9 points, the price at which the KOSPI index would fully reflect this figure is 10,250 points,” adding “The closing price of 6,789 points on the 28th represents a price that reflects only 66.2% of the consensus.” Analyst Noh pointed out, “Even at 8,000 points, there remains a 22% discount relative to the consensus.”
Regarding the current stock price level, he elaborated, “Of the 33.8% discount reflected in the current price, only about one-third has been recovered, while the remaining two-thirds is attributed to uncertainty surrounding next year’s earnings and the return on investment in artificial intelligence (AI).”
Researcher Noh continued, “The volatility index (VKOSPI) fell from 97 at the end of June to 50 at the end of August, and trading in single-stock leveraged ETFs, along with the expected rebalancing burden, has also decreased from its peak.” He added, “As volatility declines, there is room for foreign long-term funds—which had reduced their risk exposure—to re-enter the Korean stock market.”
In terms of supply and demand, he cited the share buybacks by SamsungElectronics and SK hynix as evidence. He analyzed, “SamsungElectronics and SK hynix actually acquired 10.3 trillion won worth of their own shares between August 20 and 28, and 44.7 trillion won remains to be purchased under their plans,” adding, “The market has not fully reflected the impact of these companies as buyers immediately filling the gap left by foreign investors.”
In fact, he explained that the 8.05 trillion won acquired between the 24th and 28th is roughly equivalent to the 8.32 trillion won in net foreign selling on the KOSPI.
Researcher Noh assessed, “As volatility and the burden of leveraged exchange-traded funds (ETFs) ease, firm buying will fill the gap left by foreign investors and establish a floor.”
Regarding artificial intelligence (AI) investments, he noted, “The median ratio of depreciation and amortization (D&A) to capital expenditures (CAPEX) for four AI platform companies is 3.41 times, significantly exceeding the 1.16 times seen during the first phase of cloud computing investment,” but added, “Currently, the AI asset turnover ratio has risen from 0.56 times to 0.62 times, indicating a different trajectory from the telecom bubble.” The implication is that while investment intensity has reached levels seen at the peak of past major investment cycles, it is still too early to conclude that overinvestment is occurring, given that asset turnover is rising in tandem.
Regarding concerns over the strengthening won, the firm stated, “There is limited evidence to support a blanket decline in earnings,” adding, “In nine past cases, EPS for export-oriented stocks rose 4.9% over the 12 weeks following earnings announcements.”
For the September strategy, he proposed focusing on semiconductors and shipbuilding as core sectors, while responding to profit expansion with insurance, energy, and consumer staples; for machinery, trading companies, capital goods, IT hardware, and securities, he suggested adding to positions as profit upgrades are confirmed. Analyst Noh advised, “If a decline in the earnings revision ratio coincides with a resumption of foreign selling, we will reduce positions starting with the momentum plays.”