Has the Korean stock market bottomed out? Is the extreme volatility over? 'Why Samsung Electronics looks cheap' | Shin Jungho, Head of Center

Summary

Shin Jungho, Head of Center at LS Securities, analyzes the recent extreme volatility in the Korean stock market and argues that KOSPI has likely bottomed. He explains that while memory chip margin sustainability concerns sparked the sell-off, Samsung Electronics' attractive valuation and dividend yield provide a floor. He expects a range-bound market near term and recommends buying Samsung on dips, preferring it over SK hynix due to uncertain shareholder return continuity.

• KOSPI's extreme volatility was driven by shifting views on memory chip supplier margins and supply/demand noise.
• A 43% decline from highs, with companies still profitable, suggests the market has found a bottom.
• Samsung Electronics' 5% dividend yield and potential margin defense next year support a buying case and possible PER re-rating.
• SK hynix's shareholder return policy is impressive but its sustainability is uncertain, making Samsung a preferred semiconductor pick.
• The US AI ecosystem remains intact, with US markets at all-time highs, reducing systemic risk for Korean equities.
• Near-term KOSPI is expected to stay in a 6,500–8,500 range due to slowing export growth and US midterm election uncertainty.
• A sustained rally above 7,500 requires US rate stability and concrete evidence of margin defense by Korean semiconductor firms.