Key Takeaways The Kospi benchmark has climbed over 22% since hitting bottom on July 30, officially entering bull market status Both Samsung Electronics and SK Hynix posted gains exceeding 5%
Following a devastating July correction, Samsung Electronics and SK Hynix have roared back into the spotlight, with a leading market analyst describing both semiconductor stocks as “extremely undervalued” while South Korea’s primary equity benchmark confirms a bull market recovery.
Samsung Electronics Co., Ltd., SMSD.L
The Kospi index jumped as much as 4.8% during Thursday’s session, extending its climb from the July 30 trough to approximately 22%. This milestone surpasses the widely recognized 20% threshold that defines bull market conditions.
The velocity of this rebound has been remarkable. Only weeks ago, the Kospi suffered a 22% monthly decline—its steepest single-month retreat since the 2008-2009 financial crisis. The plunge resulted from massive unwinding of leveraged positions concentrated in semiconductor manufacturers.
Samsung Electronics and SK Hynix spearheaded Thursday’s advance, with each stock posting gains exceeding 5%. The companies rank among the world’s largest memory chip suppliers, benefiting from accelerating demand tied to artificial intelligence infrastructure buildouts.
Jeff Kim, an equity analyst at KB Securities, argues that current market prices for both companies fail to account for their earnings trajectory. Using Wednesday’s closing figures, Samsung Electronics is valued at just 3.7 times its projected 2027 price-to-earnings multiple, while SK Hynix trades at 3.2 times forward estimates.
Wall Street projections point to 2027 operating income of 575 trillion won for Samsung and 389 trillion won for SK Hynix. These figures represent increases of 13.2 times and 8.2 times their anticipated 2025 performance levels.
According to Kim, the disconnect between robust earnings forecasts and depressed valuations creates significant potential for multiple expansion. He noted that forthcoming capital return initiatives at both corporations could provide additional catalysts for share price appreciation.
Samsung’s planned shareholder distributions over the coming three-year period are anticipated to exceed 600 trillion won, translating to a dividend yield above 7%.
Near-term profit momentum also appears formidable. Samsung is forecast to report third-quarter 2026 operating earnings of 112 trillion won, representing an 817% year-over-year expansion. SK Hynix is projected to deliver 77 trillion won, marking a 579% annual increase.
Both manufacturers have locked in over 60% of their production capacity through five-year supply contracts with hyperscale cloud providers as memory chip pricing continues ascending.
While the recent surge has been impressive, market observers remain circumspect. The Kospi still trades roughly 24% beneath its late June peak.
International investors have withdrawn more than $100 billion from Korean equity markets during the current year. However, some overseas institutional funds have begun returning, attracted by compressed valuations.
A cooler-than-expected US inflation reading released on Wednesday also bolstered market sentiment by diminishing concerns about additional Federal Reserve interest rate increases.
South Korea’s stock market maintains heavy exposure to chip manufacturers. Industry watchers caution this concentration creates vulnerability should investor enthusiasm for AI-related spending cool.
Korean financial authorities have implemented measures designed to prevent forced liquidation events, including restrictions on single-stock leveraged exchange-traded funds and stricter margin lending standards.
Market strategists emphasize that the recent pace of appreciation is unlikely to continue indefinitely.
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