Yang Ji-hwan, Research Center Director at Daishin Securities, stated in a recent interview with Edaily that concerns over AI investment slowdown are overblown and represent a repeated pattern from the past three years. Yang emphasized that adjustments in Samsung Electronics and SK Hynix should not be interpreted as signals of AI industry deceleration, noting that AI infrastructure investment and memory demand remain robust, with recent corrections driven primarily by profit-taking. He maintained an overweight recommendation on semiconductor stocks, citing Meta's upward revision of capex guidance and expanded data center computing capacity as evidence that investment momentum has not weakened. Yang contextualized the market reaction by noting that AI investment slowdown fears have been a recurring theme over the past three years, and the recent Meta-driven shock does not warrant overinterpretation.
Yang Maintains Overweight on Semiconductors Amid Target Price Debate
Yang Ji-hwan maintained an overweight stance on semiconductor stocks, stating that AI infrastructure investment continues to expand and memory profitability improvements will persist amid supply bottlenecks. He dismissed market interpretations of Meta's AI cloud business entry as a sign of investment slowdown, noting that Meta raised its capex outlook for the year and expanded data center computing capacity. Yang explained that Meta's strategy aims to monetize capacity and model access in response to future demand changes, not due to infrastructure overcapacity. He assessed the likelihood of recent concerns translating into actual demand slowdown or memory profitability deterioration as low.
Yang attributed recent semiconductor stock corrections to profit-taking, stating that rapid price gains created strong profit-taking incentives and heightened sensitivity to minor news. He commented on negative views from global investment banks including Morgan Stanley and UBS, suggesting that these analysts appear focused on short-term price movements rather than estimating future earnings and appropriate valuations. Regarding divergent target prices for Samsung Electronics and SK Hynix among domestic securities firms, Yang noted that downward revisions to earnings estimates naturally lead to target price adjustments, with Samsung Electronics' operating profit estimates reduced by approximately 5 trillion to 6 trillion won due to performance bonus and cost issues. He cautioned that excessively high target prices should be evaluated for feasibility, noting that some target prices would imply market capitalizations near 3,000 trillion won, requiring KOSPI levels far higher than current levels.
KOSPI Forecast at 10,000–11,000 Points with Q2 Earnings Focus
Yang forecast that the second-half market has additional upside potential based on an earnings-driven rally. He stated that applying a price-to-earnings ratio of 10x to current 12-month forward earnings per share suggests KOSPI could reach 11,000 points, with 10,000 points achievable even under conservative assumptions. Yang emphasized that non-semiconductor sectors including shipbuilding and defense should also attract attention during the Q2 earnings season, as these sectors are likely to recover from recent underperformance supported by export strength and foreign exchange effects. He anticipated that balanced earnings improvements across both semiconductor and non-semiconductor sectors would reduce KOSPI concentration and strengthen the upward trend.
H2 Market Outlook Anticipates August-September Inflection Point
Yang identified late August and early September as a potential inflection point, noting that forward EPS momentum may peak after the Q2 earnings season, while changes in US monetary policy and oil price movements could increase market volatility. He assessed the likelihood of a trend reversal as low, citing ongoing global manufacturing recovery and semiconductor-centered profit momentum. Yang stated that declining bond yields and dollar weakness would support foreign investor inflows and bolster market upside momentum.
FAQ
Why did Yang Ji-hwan dismiss AI investment slowdown concerns?
Yang stated that AI investment slowdown concerns have been a repeated pattern over the past three years and do not reflect actual conditions. He cited Meta's upward capex revision and expanded data center capacity as evidence that AI infrastructure investment remains on track, with recent semiconductor stock corrections driven by profit-taking rather than fundamental weakness.
What is Yang's KOSPI forecast for the second half?
Yang forecast KOSPI could reach 10,000 to 11,000 points based on 12-month forward earnings per share and a price-to-earnings ratio of 10x. He emphasized that Q2 earnings improvements across both semiconductor and non-semiconductor sectors would support the upward trend, though he noted potential volatility in late August and early September as forward EPS momentum peaks.
