KOSPI Soars, Records Lowest Valuation in History

This year, the KOSPI has surged by about 80% and is trading at a record low 12-month forward price-to-earnings ratio (PER) of 6.4 times. While the earnings outlook for Samsung Electronics and SK Hynix is driving the stock price increase, questions have been raised about the sustainability of the memory semiconductor boom. The profit outlook for KOSPI-listed companies has been revised upward for 17 consecutive months, with this year's forecast for forward earnings per share (EPS) expected to increase by about 170%. However, the market remains cautious about how long the memory semiconductor boom will last. Although the KOSPI has recorded the highest growth rate among major global stock markets, it is trading at a lower PER than Taiwan's TAIEX, which has a high semiconductor weighting. Francis Tan, Chief Strategist at India Suez Wells Asia, assessed that this is an opportunity for investors with a low allocation in AI-related stocks to enhance their portfolio growth potential. On the other hand, Charu Chanana, Chief Investment Strategist at Saxo Markets, warned that investment decisions should not be made solely based on a low PER, emphasizing the need for further confirmation regarding the sustainability of the memory semiconductor boom. The price-to-book ratio (PBR) has surpassed 2 for the first time this year.

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