Kim Young-hwan

While memory chips face headwinds from high interest rates and elevated oil prices, sectors such as banks, shipping, and oil refining directly benefit from those conditions. Allocating a portion of the portfolio (around 40%) to these sectors provides a hedge and can generate returns precisely when the semiconductor trade is struggling, balancing the overall portfolio.

SK hynix should trade closer to Micron's valuation multiple (12x earnings vs SK hynix ~6x). If the valuation gap narrows to be similar to Micron, the target price is around 3 million won, supported by strong earnings momentum and the likely ADR listing.

To endure the volatility while waiting for rate cuts, keep 60% in semiconductors and allocate 40% to rate-sensitive or cash-cow sectors like banks, transportation, oil refiners, food & beverage, and cosmetics.

To endure the volatility while waiting for rate cuts, keep 60% in semiconductors and allocate 40% to rate-sensitive or cash-cow sectors like banks, transportation, oil refiners, food & beverage, and cosmetics.

Semiconductors won't be the leading sector again. Look for sectors that rise between late June and late September, such as healthcare, biotech, software, and European equities, as they are likely to be the new market leaders in Q4.

To endure the volatility while waiting for rate cuts, keep 60% in semiconductors and allocate 40% to rate-sensitive or cash-cow sectors like banks, transportation, oil refiners, food & beverage, and cosmetics.

Samsung Electronics and SK hynix are trading at extremely low P/E multiples of 3–4x while generating record earnings. If the companies start share buybacks, the yield would be around 29%, which is enormously accretive. Announcing credible shareholder return policies (buybacks) would send a strong signal that management believes long-term earnings will remain high, acting as the first catalyst for a rebound before the interest rate outlook improves. A second leg higher would follow once rate cuts become clearer. The market currently fears peak cycle margins, but long-term supply agreements could extend earnings stability.

The KOSPI index is deeply undervalued relative to earnings, especially driven by semiconductor profits which account for over 50% of market cap. With earnings rising fast and valuation multiple still low, KOSPI can reach 9,000 points, which is only a fair level (P/E ~10x) and not excessive.