"KOSPI 6000 within a year" bold forecast… target prices raised one after another

JPMorgan "KOSPI 6000 possible within a year"… ride the leading stocks

Promising stocks picked by foreigners and institutions

Separate taxation of dividend income · mandatory cancellation of treasury shares…

A series of policies to improve the Korean stock market's structure

Semiconductor supercycle continues due to AI issue

"Attractiveness of autos · finance · holding companies · shipbuilding · defense"

Global investment bank JPMorgan has issued a forecast that the KOSPI index could "reach 6000 within a year," and positive outlooks from domestic and foreign experts on the Korean stock market continue. The likelihood of an AI-driven 'semiconductor supercycle' persisting is high, and structural improvement policies such as adjustments to separate taxation of dividend income and mandatory cancellation of treasury shares are following.

Foreign securities firms have been raising target prices for shipbuilding and automotive sectors, and domestic experts also point to holding companies, finance and policy-beneficiary stocks, as well as traditional leading sectors like shipbuilding, defense and nuclear power as promising sectors.

◇JPMorgan "Korean market reform proceeding smoothly"

On the 10th, according to the financial investment industry, JPMorgan recently raised its 12-month KOSPI index forecast to 5000 in a report titled 'KOSPI 5000 possible… corrections are additional buying opportunities,' and said that in a bull scenario it could reach up to 6000. JPMorgan emphasized that "although some say the recent rise is excessive, Korea remains the top-preferred market in Asia with still large upside potential." Although the KOSPI has risen about 70% so far this year, JPMorgan analyzed that valuations (price relative to earnings) are much lower than global and Asian averages.

JPMorgan cited governance-improvement policies such as the third amendment to the Commercial Act as conditions for further KOSPI gains. Mixo Das, JPMorgan Asia equities strategist, said "Korean market reform is proceeding smoothly" and "we have confirmed that policymakers are sincere about implementing new governance standards."

Other foreign securities firms are also raising target prices for major domestic stocks one after another. Swiss UBS recently significantly raised target prices for major affiliates in a report related to HD Hyundai Group. UBS upgraded its rating on HD Hyundai Heavy Industries from 'neutral' to 'buy' and raised the target price from 390,000 won to 725,000 won, an increase of 86%. The target price for HD Korea Shipbuilding & Offshore was adjusted up from 340,000 won to 640,000 won, an 88% increase.

The firm's re-evaluation of domestic shipbuilders is based on the expectation that the 'MASGA project' will accelerate following the conclusion of Korea-US tariff negotiations. UBS analyzed of HD Hyundai Heavy Industries that "the stock is trading at an estimated 2028 PER of around 20x" and "considering Korean defense stocks are recognized at up to 29x PER, there is ample room for re-rating."

Foreign securities firms have also presented revised target prices for the automotive sector in succession. Australian Macquarie raised Hyundai Motor's target from 260,000 won to 300,000 won, stating that "Hyundai has secured a favorable position in the US market through expansion of its hybrid lineup."

Bank of America (BoA) raised Kia's target from 116,000 won to 160,000 won, a 38% increase, saying "a breakout from the box range appears possible." In addition, HSBC set LG Innotek's target at 220,000 won to 290,000 won, and CLSA raised LG Electronics' target from 94,000 won to 110,000 won.

◇"KOSPI could surpass 5000 in the first half of next year"

Domestic experts also agree that the Korean market's boom may continue. They say that if profit growth cycles for leading sectors like semiconductors are followed by shareholder-friendly policies, surpassing 5000 in the first half of next year is possible. Ahn Jung-hwan, CEO of Interlace Asset Management, said "Global major economies are tolerating inflation while all asset prices are rising," and predicted "the KOSPI could comfortably reach 4500, which corresponds to a PBR of about 1.5x."

Many were also positive about the unprecedented possibility of a 'KOSPI 5000.' Cho Su-hong, head of NH Investment & Securities Research Center, said "next year's export forecasts are being revised upward and there are many additional drivers like shareholder-friendly policies," adding "I think reaching 5000 by the first half of next year is possible." Kim Tae-hong, CEO of Growth Hill Asset Management, also noted "if shareholder return rates rise to global levels through policy, 5000 is not impossible."

Most named semiconductors as the sector that will lead the market through the first half of next year, expecting a continued memory semiconductor supply shortage due to the AI supercycle. Kim said, "It's hard to predict whether semiconductor profit peaks will be in the second half of next year or in 2027," adding "I still think valuations are not high."

Sectors expected to follow or join semiconductors in driving the rally include holding companies and finance as beneficiaries of shareholder returns, and traditional leaders such as shipbuilding, defense and nuclear power. Kang Dae-kwon, CEO of Life Asset Management, forecasted that "if the dividend income tax rate is improved to 25%, financial stocks could rise once more."

Lee Jin-woo, head of Meritz Securities Research Center, emphasized that "shipbuilding, defense and nuclear power are mega-trends and long-term leading sectors" and "since these industries involve state-led investment declarations, there is no doubt about the upward direction of their stock prices."

Reporter Park Han-shin phs@hankyung.com