South Korea’s equity market trades at a discount, reflecting governance concerns
and the historically cyclical profits of Samsung and SK Hynix, which together
make up more than half of KOSPI market value. Some analysts argue AI could
create demand beyond a typical memory boom‑bust, but KOSPI’s low P/E suggests
many remain unconvinced. Charu Chanana, chief investment strategist at Saxo
Markets, says Korea needs evidence the memory supercycle has staying power and
that cheap valuations alone are not a buy; she warns many mega‑caps may still
spend heavily this quarter but will begin talking cost optimization, a negative
for memory demand if high prices suppress volumes. Jason Minsang Kam, head of
active equities at Kyobo Life Insurance, notes KOSPI EPS estimates for the year
have risen roughly 170% and describe an unprecedented surge in earnings
momentum, but he cautions on extreme volatility and recommends avoiding Korean
chipmakers given their high earnings cyclicality.
