[Edaily Reporter kyoungeun kim ] Forecasts suggest that the KOSPI will challenge the 10,000-point mark in the second half of next year, driven by a further surge in earnings from leading artificial intelligence (AI) and semiconductor stocks. Analysts predict that while the index will trade sideways through the first half due to the burdens of high inflation, tight monetary policy, and high interest rates, as well as outflows of foreign capital, it will follow a “weak first half, strong second half” trend in the second half as valuations and supply-demand dynamics gradually normalize.

In its “2027 Stock Market Outlook” report released on the 13th, Yuanta Securities Korea projected next year’s KOSPI range to be between 6,000 and 10,000. On a quarterly basis, the firm projected the following ranges: 6,000–7,500 for the fourth quarter of this year and the first quarter of next year; 6,500–8,000 for the second quarter; 7,500–9,000 for the third quarter; and 8,500–10,000 for the fourth quarter. The firm assessed that, in the best-case scenario, the index could rise to the 12,000 level, while even in the worst-case scenario, the downward support at the 6,000 level remains solid.

The upper limit of the index was calculated by applying a target price-to-earnings ratio (PER) of 7.3x to the KOSPI’s projected net profit of 1,160 trillion won for next year (949.3 trillion won for AI and semiconductors, and 210.1 trillion won for non-AI and non-semiconductor sectors). As of the 8th, the KOSPI’s PER stood at 5.11x.

Kim Yong-gu, an analyst at Yuanta Securities Korea, explained, “If earnings forecasts for the AI and semiconductor value chains are revised upward by 10% from the current consensus, and those for non-AI and non-semiconductor sectors are revised downward by 10%, next year’s KOSPI operating profit would reach 1,410 trillion won and net income attributable to controlling shareholders would reach 1,160 trillion won, marking the entry into the ‘1,000 trillion won era’ for both metrics.”

He assessed that the current market sentiment is overwhelmingly pessimistic. Analyst Kim stated, “Overseas investors are downplaying South Korea’s quantum leap in exports and earnings as a mere blip, and a significant number of domestic institutions are deeply discouraged by a market that shows no response even after the ‘ SamsungElectronics(005930)’ achieved third-quarter operating profits in the 100 trillion won range.” He added, “Retail investors, too, have begun to turn their backs, once again muttering the sarcastic saying, ‘Escaping the national market is a matter of intelligence.’” He went on to emphasize, “We need to remember that lotus flowers bloom from murky water, and that starting from the lowest point has always allowed us to secure sufficient distance and opportunity.”

He viewed the downside as solid. Analyst Kim analyzed, “The KOSPI has already passed through the July panic and reached a medium- to long-term and historical bottom, having fallen 35–40% from its recent two-year high,” adding, “The expected return through the first half of next year is at least 25%.”

He cited the following as drivers of the uptrend: △ the Fed’s interest rate hikes being limited to a maximum of two by the end of next year; △ the peak of risks associated with high inflation, tight monetary policy, and high interest rates having passed, with the U.S. 10-year Treasury yield returning to the 4.8–5.0% range; △ easing doubts regarding the continuation of the capital expenditure supercycle among Big Tech and hyperscalers; △ the normalization of multiples across the relevant value chain; and △ explosive earnings growth for leading South Korean AI and semiconductor stocks, backed by long-term supply agreements (LTAs) in the 80% range.

Exports, expected to surpass $1 trillion this year, are also forecast to continue their strong momentum next year. Yuanta Securities Korea projected that South Korea’s exports next year will reach $1.5162 trillion, a 29.6% increase from this year’s estimated $1.1698 trillion. In particular, semiconductor exports are expected to rise 46.3% to $747 billion, surpassing the volume of non-semiconductor exports for the first time.

The key lies in a shift in foreign investors’ perspective. Researcher Kim stated, “Foreign investors remain skeptical of South Korea’s momentum as the world’s second-largest economy, driven by semiconductors, and continue to sell off shares despite valuations at historic lows,” adding, “This stems from a lack of confidence in South Korea’s medium- to long-term earnings outlook, the perception that Taiwanese semiconductors are far more attractive than South Korean ones in terms of AI investment, and a reluctance to hold the extremely volatile South Korean market in greater weight than those of China, France, Germany, or India.”

He pointed out that for foreign investors to change their view on the semiconductor “one-two punch”—SamsungElectronics and SK hynix—the following conditions are necessary: △ passing the peak of high-interest-rate risks; △ revenue growth from hyperscalers; △ proving earnings that exceed market expectations; △ early expansion of production capacity and yield improvements; and △ aggressive shareholder returns on par with U.S. Big Tech companies. Researcher Kim stated, “Although the upper limit of the KOSPI P/E ratio will be capped at 6.6x (index at 8,000) through the first half of next year, a partial normalization to 7.3x (index at 10,000) will be possible in the second half if foreign investors’ views gradually shift.”

Yuanta Securities identified semiconductors, IT home appliances (rechargeable batteries), IT hardware, shipbuilding, machinery, chemicals, and biotech as the leading sectors for next year. The firm listed the following as its top picks: Samsung Electronics, SK Hynix, SamsungElectroMechanics(009150), KB Financial Group(105560), DOOSAN ENERBILITY(034020), SAMSUNG SDI CO.,LTD.(006400), Celltrion(068270), LS ELECTRIC(010120), S-OilCorporation(010950), LIG Nex1 Co., Ltd.(079550), HyundaiEngineering&Construction(000720), HD HYUNDAI MARINE SOLUTION CO., LTD(443060), DaeduckElectronics(353200), INTELLIAN TECHNOLOGIES Inc.(189300), and #Tomocube.