Lee Jae-man, head of Hana Securities' Global Investment Analysis Division, issued a report on May 18 forecasting a KOSPI market peak, citing SK Hynix's market capitalization overtaking Samsung Electronics as a key signal. The scenario materialized when SK Hynix surpassed Samsung for the first time on the 22nd of last month, the same day KOSPI reached an all-time high of 9114.55 points, before declining approximately 20% to 7291.91 by the 9th. Lee attributed the peak timing to a structural pattern where a company with lower 2026–2027 earnings estimates (SK Hynix) overtook a larger peer (Samsung), similar to Cisco Systems surpassing Microsoft and General Electric in March 2000 before the dot-com crash. Despite the sharp correction, Lee now characterizes the current level as a bottom zone rather than structural collapse, projecting a long-term upper target of 11,450 points based on 2027 earnings estimates of 946 trillion won and an average price-to-earnings ratio of 9.96 since 2010. The reassessment comes amid broader market pessimism following the rapid 20% decline in Korean stocks, with Lee emphasizing that the drop reflects temporary psychological overselling rather than fundamental deterioration in semiconductor-driven earnings growth.
Lee Jae-man Predicted Market Peak on May 18 Using Samsung-SK Hynix Market Cap Reversal
Lee Jae-man issued a report titled 'KOSPI, Now Entering the 10,000-Point Era' on May 18, identifying the end signal of the bull market. The core basis was the market capitalization reversal between SK Hynix and Samsung Electronics. Lee stated, "If SK Hynix, whose 2026–2027 net profit estimates are smaller than Samsung Electronics, overtakes Samsung's market cap, the bull market has reached its peak." SK Hynix surpassed Samsung's market capitalization for the first time on the 22nd of last month, and KOSPI recorded an all-time high of 9114.55 points the same day. The index subsequently fell approximately 20% to 7291.91 by the 9th. The pattern resembles March 2000 when Cisco Systems overtook Microsoft and General Electric to become the S&P 500's largest company by market cap, immediately before the market collapsed.
Analyst Assesses Current KOSPI Level as Bottom Zone Based on 20% Decline Pattern
Lee re-evaluated the current market as a bottom zone in a recent report, stating, "KOSPI has technically reached a complete bottom level." The basis for this assessment is the historical pattern of a maximum 20% decline. Since 2023, KOSPI has repeatedly declined approximately 20% from the previous high before rebounding. Applying this to the recent high of 9114 points yields a bottom of approximately 7290 points. Since the index has fallen to this level, the probability of a technical rebound is high, according to the analysis. Lee's short-term rebound target is 9240 points. This figure applies the recent average 20-day moving average deviation rate (103.3%), representing a level where the price gap that widened excessively due to temporary panic normalizes as it converges toward fundamentals.
Hana Securities Projects Long-Term KOSPI Target of 11,450 Points Using 2027 Earnings Estimate
Lee presented a long-term upper target of 11,450 points for KOSPI. This results from applying an average price-to-earnings ratio (PER) of 9.96 times since 2010 to the 2027 KOSPI listed company net profit estimate of 946 trillion won. The quantitative analysis combining corporate earnings and valuation emphasizes that the current decline represents a psychological oversold phase rather than fundamental damage. This year's KOSPI overall net profit growth rate is estimated at 235%, with next year at 30%. Samsung Electronics (570% and 33%) and SK Hynix (410% and 38%) profit growth rates significantly exceed the market average, indicating that the semiconductor-centered profit structure remains solid.
Big Tech CAPEX Growth Continues Despite Free Cash Flow Decline
Lee addressed concerns about semiconductor peak theory and artificial intelligence (AI) investment slowdown. US Big Tech companies' capital expenditures (CAPEX) increased 81% year-over-year in Q1 this year and are forecast to expand to 90% in Q3. Big Tech companies' free cash flow (FCF) dropped sharply from $51.8 billion in Q3 last year to $19.1 billion in Q1 this year. If investment expansion continues, temporary negative conversion is possible in Q3–Q4 this year. FCF is forecast to turn positive again starting Q1 next year, entering the investment recovery phase. This suggests that investment peak-out controversy may intensify after 2027, but Lee's assessment is that there is no need to interpret this as excessive fear by pre-reflecting it in stock prices at the current time. The current plunge represents a short-term overheating resolution process rather than structural collapse, according to the analysis.
FAQ
How did Lee Jae-man predict the KOSPI peak on May 18?
Lee Jae-man identified the market peak by analyzing the market capitalization reversal between SK Hynix and Samsung Electronics. He stated that when SK Hynix, whose 2026–2027 net profit estimates are smaller than Samsung Electronics, overtook Samsung's market cap, the bull market reached its peak. This scenario occurred on the 22nd of last month when SK Hynix surpassed Samsung for the first time, and KOSPI recorded an all-time high of 9114.55 points the same day.
Why does Hana Securities assess the current KOSPI level as a bottom zone?
Hana Securities bases the bottom zone assessment on the historical pattern of KOSPI declining approximately 20% from the previous high before rebounding. Applying this pattern to the recent high of 9114 points yields a bottom of approximately 7290 points. Since the index fell to 7291.91 by the 9th, the analysis indicates KOSPI has reached a technical bottom level, with a short-term rebound target of 9240 points based on the 20-day moving average deviation rate of 103.3%.
What is the basis for the 11,450-point long-term KOSPI target?
The 11,450-point target applies an average price-to-earnings ratio (PER) of 9.96 times since 2010 to the 2027 KOSPI listed company net profit estimate of 946 trillion won. This year's KOSPI overall net profit growth rate is estimated at 235%, with next year at 30%. Samsung Electronics and SK Hynix profit growth rates of 570%/33% and 410%/38% respectively exceed the market average, supporting the view that the semiconductor-centered profit structure remains fundamentally solid despite the recent decline.
