Hana Securities analyst Lee Jae-man stated that KOSPI reached a technical bottom after falling 8.95% to 6,806.93 on July 13. SK Hynix declined 15% and Samsung Electronics dropped over 10% on the same day. Lee forecasts the index could rise to 11,450, citing three factors: a maximum drawdown rule showing -20% from the peak of 9,114 equals a 7,290 floor already reached, a 20-day moving average deviation target of 9,240, and 2027 earnings estimates of 946 trillion won multiplied by the historical average PER of 9.96x. He attributed the decline to technical oversold conditions rather than weakening fundamentals. His forecast follows his May 18 report that accurately predicted the market top when SK Hynix market cap overtook Samsung on June 22, the day KOSPI hit its record high of 9,114.55 before dropping 20% to 7,291.91 by July 9.
Hana Securities Cites Three Technical Indicators Supporting KOSPI Recovery to 11,450
Lee Jae-man presented three arguments for KOSPI's potential rise to 11,450. The first is the maximum drawdown rule: since 2023, KOSPI's largest drop from a previous high to bottom has been -20%, a threshold never breached. Applying this rate to the recent peak of 9,114 yields a floor of 7,290, which the current index has already reached. The second factor is the 20-day moving average deviation, which averaged 103.3% in the past year. Lee stated that as the gap between the index and its moving average narrows to this historical average, KOSPI could rebound relatively quickly to 9,240. The third calculation combines earnings and valuation: multiplying the 2027 KOSPI earnings estimate of 946 trillion won by the historical average PER of 9.96x since 2010 produces an upper target of 11,450. Lee stated that the current decline reflects psychological overselling rather than fundamental deterioration, and that long-term upward momentum toward the 10,000 level remains intact.
Lee Jae-man Rebuts Semiconductor Peak Concerns With Earnings Growth Data
Lee dismissed market concerns about a semiconductor sector peak as premature. He noted that the profit dominance of Samsung Electronics and SK Hynix remains unshaken. The 2026 KOSPI aggregate earnings growth forecast is 235%, and 2027 is 30%, while Samsung Electronics is projected to grow 570% in 2026 and 33% in 2027, and SK Hynix 410% in 2026 and 38% in 2027. Lee stated that sector rotation typically begins when earnings gaps narrow, but the current data shows no such convergence. Regarding concerns over slowing AI capex by US Big Tech companies, Lee countered that the data tells a different story: Big Tech year-over-year investment growth rose from 81% in Q1 to 90% in Q3, indicating the peak has not yet been reached.
Analyst Warns Real Risk Period Begins After H2 Next Year as Big Tech Capex Growth Slows
Lee identified the real risk phase as starting after H2 next year. He stated that beginning in Q3 next year, when capex growth rates fall below revenue growth rates, debates over whether Big Tech investment has peaked will intensify, increasing pressure for capital withdrawal. Lee noted that Big Tech free cash flow (FCF) will briefly turn positive in Q1 next year, providing a breather, but emphasized there is no need to preemptively panic and price in this scenario at the current moment.
Lee's May Report Accurately Predicted Market Top When SK Hynix Overtook Samsung
Lee gained attention with his May 18 report titled "KOSPI, Now Entering the 10,000 Era." In that report, he warned that if SK Hynix's market capitalization, with lower 2026-2027 earnings estimates than Samsung Electronics, surpassed Samsung, it would signal the bull market had reached its peak. SK Hynix's market cap exceeded Samsung's for the first time on June 22, the same day KOSPI hit its all-time high of 9,114.55. Within just two weeks, by July 9, KOSPI plunged 20% to 7,291.91, entering a correction phase. In the May report, Lee referenced the 2000 precedent to illustrate the relationship between corporate earnings and bubble collapse: on March 27-28, 2000, Cisco Systems overtook Microsoft and GE to become the largest company by market cap in the S&P 500, despite Cisco's 2000 earnings of $2.7 billion representing only 20% of GE's earnings and 28% of Microsoft's.
FAQ
What technical bottom level did Hana Securities identify for KOSPI after the July 13 drop?
Hana Securities analyst Lee Jae-man stated that KOSPI reached a technical bottom after falling to 6,806.93 on July 13, citing the maximum drawdown rule showing a -20% decline from the peak of 9,114 equals a floor of 7,290, which the index has already reached.
Why did Lee Jae-man dismiss concerns about a semiconductor sector peak?
Lee stated that concerns are premature because Samsung Electronics and SK Hynix maintain dominant earnings growth forecasts of 570% and 410% respectively for 2026, far exceeding the KOSPI aggregate growth rate of 235%, with no signs of the earnings gap narrowing that would typically trigger sector rotation.
When did Lee Jae-man predict the real risk period for KOSPI would begin?
Lee identified the real risk phase as starting after H2 next year, specifically from Q3 next year onward, when Big Tech capex growth rates are expected to fall below revenue growth rates, intensifying debates over whether investment has peaked and increasing pressure for capital withdrawal.
