Daishin Securities sharply raised this year's KOSPI target from 8,800 to 11,500. It said earnings projections, led by semiconductors, are improving quickly, and the possibility of valuation normalization driven by expanded shareholder returns has increased. However, it assessed that the inflection point in the current uptrend could come in late August to early September this year.

Stock closing prices including KOSPI appear on an electronic board in the dealing room at Hana Bank in Jung-gu, Seoul, on the 16th./Courtesy of News1

Researcher Lee Kyung-min at Daishin Securities said in a report on the 17th, "We are raising the 2026 KOSPI target from 8,800 points to 11,500 points," adding, "Even valuation normalization based on earnings alone can lift the index to a higher level."

Daishin Securities estimated net profit for the semiconductor sector at 605 trillion won and for the non-semiconductor sector at 227 trillion won. It derived the KOSPI target by applying a price-earnings ratio (PER) of 8.8 times for semiconductors and 15 times for non-semiconductors.

Earnings prospects are also improving rapidly. The KOSPI 12-month forward earnings per share (EPS) rose from 666.6 points at the end of March to 926.8 points at the end of April, and to 1,056.4 points as of the 15th. Lee said, "Even as the KOSPI is attempting to break above the 8,500 level, the forward PER is only around 8 times," adding, "There is ample room for additional gains through valuation normalization alone."

Expectations are particularly high for the semiconductor sector. Daishin Securities projected that second-quarter operating profit and net profit for the semiconductor sector will increase 56% and 37%, respectively, from the previous quarter. Market research firm TrendForce expects second-quarter semiconductor price increases to be in the 58%–75% range from the previous quarter.

Lee explained, "Nearly 70% of transactions for DRAM used in artificial intelligence (AI) servers are proceeding in the form of long-term contracts," adding, "The expansion of long-term contracts is a factor that increases the likelihood of valuation normalization for the semiconductor sector."

The analysis is that conditions are also turning favorable for non-semiconductor sectors. Reflecting the implementation of Commercial Act revisions, large-scale cancellation of treasury shares, and stronger shareholder return policies, it projected that the non-semiconductor sector PER, currently at 12.71 times, could improve to 15 times.

Daishin Securities sees the KOSPI's uptrend continuing for the time being. Lee said, "The KOSPI is currently in a classic earnings- and policy-driven market," adding, "Until the uptrend in forward EPS reverses, we should keep the KOSPI's upper bound open."

However, it assessed that the inflection point of the uptrend could be from late August to early September this year. Lee said, "From the latter part of the third quarter of 2026, base effects could weigh on the earnings growth rate," adding, "Around the Jackson Hole meeting in late August and the Federal Open Market Committee (FOMC) in September, we need to review potential changes in the liquidity environment and monetary policy."

Lee added, "If oil price increases resume and the likelihood of entering a cycle of liquidity tightening and rate hikes grows, the current earnings- and macro-driven market could shift to a reverse financial market," adding, "We should watch late August to early September as a key inflection point."

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