If KOSPI Holds 6,000, It's 8,000... The Target Is 9,300 | Hong Seon-ae, Lee Kyung-min, Daishin Securities FICC Research Department Head

Summary

Lee Kyung-min, FICC Research Head at Daishin Securities, reviews the violent July sell-off in KOSPI, arguing that the worst is over after an extreme leverage unwind and that valuations have reached crisis-level cheapness. He sets a KOSPI target of 9,300 based on a PBR normalization to 7-8x. He sees semiconductors remaining the market center once the over-concentration digests, while a rotation into KOSDAQ is supported by falling bond yields and the new tier promotion policy. He also highlights US stocks Nvidia and Sandisk as attractive and differentiates hyper-scaler winners Microsoft/Amazon from loser Meta.

• KOSPI extreme correction was driven by leverage unwinding and sentiment, not fundamental deterioration; bottom passed.
• PBR fell to 4.85x, below past crisis levels, while earnings outlook outside semis remains strong.
• KOSPI recovery target set at 9,300 assuming PBR normalizes to 7-8x, still below historical averages.
• Semiconductor sector to regain market leadership after current over-concentration digests; memory cycle intact, China fears overblown.
• KOSDAQ rotation triggered by Korea 10y yield drop from 4% to 3.7% and tier promotion policy benefiting select small-cap tech and biotech.
• Nvidia trading at only 23x earnings with momentum inflecting positively; Sandisk attractive after big pullback with strong NAND pricing.
• Hyper-scaler differentiation: Microsoft and Amazon monetizing AI spending, while Meta disappoints; directional split among big tech.
• Tactical advice: stay with semiconductors through the volatility, avoid chasing recent outperformers, and look for laggards.