Goldman Sachs Sticks by Kospi Target as Brokerages Slash Forecasts

Goldman Sachs has reaffirmed its bullish stance on South Korean equities, maintaining its 12-month Kospi target of 12,000 despite a recent market plunge. The bank's chief Asia-Pacific equity strategist, Timothy Moe, said the Kospi is currently in oversold territory relative to fundamentals.

The sell-off was triggered by concerns over a slowdown in the memory semiconductor cycle, but Goldman Sachs believes that market anxiety has overshot the actual deterioration in underlying fundamentals. The bank notes that supply shortages could persist through 2030, potentially allowing memory manufacturers to sustain pricing power and profitability for longer than in previous cycles.

Goldman Sachs also sees opportunities beyond the semiconductor sector, forecasting that earnings for South Korean non-memory companies will grow 71% this year and 20% next year. The bank highlights that current valuations are low both in absolute terms and relative to historical averages.