Kim Ki-hoon, CEO of Epic Investment, now recommends Samsung Electronics over SK Hynix for semiconductor stock investment, citing Samsung's competitive positioning in AI chip technology. The investment strategist pointed to Samsung's first unveiling of HBM4 high-bandwidth memory samples and the company's foundry business expected profitability turn in the second half as key factors shifting his previous preference. This assessment comes as investors debate whether to maintain semiconductor stock positions or rotate into undervalued sectors during the current market cycle.
Kim shared his analysis in an interview with Money Today's YouTube channel 'Bukkumi - Ants Dreaming of Wealth,' outlining why semiconductor stocks remain the market's leading sector despite calls for portfolio rotation.
Samsung Advances HBM4 Technology and Foundry Profitability Outlook
Kim explained his shift in preference between the two semiconductor giants. "Until Samsung Electronics' labor strike, I viewed SK Hynix more favorably. I thought the strike would create discomfort for foreign investor inflows," he stated. "But now Samsung Electronics has reached a point worth considering. Samsung has changed in the AI semiconductor sector."
The investment chief highlighted Samsung's technological progress in high-bandwidth memory. "Up to HBM3, overheating was an issue. This is why SK Hynix's stock price appreciation rate exceeded Samsung Electronics," Kim noted. "Samsung unveiled samples of next-generation high-bandwidth memory 'HBM4' first, showing they've changed. Because of this, Samsung Electronics' discount factors may disappear going forward."
Kim also cited Samsung's foundry division as a positive catalyst. "Forecasts indicate the foundry segment will turn to profitability in the second half. This will also be helpful," he said. While acknowledging SK Hynix's advantageous supply-demand position from its ADR listing on the 10th in the United States, Kim stated he now gives more weight to Samsung Electronics.
Semiconductor Stocks Remain Market Leaders Amid Rotation Discussions
Addressing the debate between maintaining semiconductor positions versus rotating into other sectors, Kim affirmed semiconductors' continued leadership role. "The leading stocks are still semiconductors. Because stocks are in an undervalued state, it's difficult to say semiconductor stocks will break down," he explained.
The strategist outlined a balanced approach to market rotation. "When stock prices reach the upper end of valuation, you can realize some profits. At that time, opportunities for rotation into other sectors will also come," Kim said. "However, if semiconductor stock earnings are revised upward, valuations will drop again. When this happens, you can use it as another buying opportunity."
Kim cautioned against indiscriminate sector rotation. "In a rotating market, you shouldn't look at companies whose earnings are deteriorating. You need to look at companies that truly have growth opportunities but have been suppressed because of the semiconductor monopoly," he advised. "I think it's correct to view semiconductor leadership as the basic framework while also watching for rotation opportunities."
KOSPI 10,000 Target Supported by Valuation and Foreign Investment Trends
When asked about the possibility of KOSPI reaching 10,000, Kim responded affirmatively. "Yes. Compared to previous semiconductor cycles, this semiconductor cycle has different sustainability. Yet sufficient valuation has not been achieved," he stated.
The investment chief analyzed current market dynamics. "This year, foreign investors sold in KOSPI. It seems like the market is overflowing with capital, but in fact it was all used to absorb foreign selling," Kim explained. "Because of this, while the index rose, stock valuations fell. Therefore, if valuation expansion occurs and the supply-demand environment improves, KOSPI hitting 10,000 is possible."
KOSDAQ Performance Tied to Sector-Specific Weakness in Bio and Battery Stocks
Regarding KOSDAQ's underperformance relative to KOSPI, Kim attributed the divergence to sector composition rather than market-wide weakness. "Actually, rather than KOSPI and KOSDAQ markets being divided, I think it's a difference by sector," he said.
Kim pointed to strong performers within KOSDAQ. "Even in KOSDAQ, stocks like semiconductor front-end equipment have high returns. However, in KOSDAQ, bio and secondary batteries don't have high returns, and since these stocks have large market cap weight, the KOSDAQ market overall had low appreciation rates," he explained. "Also, domestic interest rate increases affected the KOSDAQ market."
The strategist emphasized earnings-focused stock selection. "Even in KOSDAQ, I think stocks with increasing profits will improve. Companies in sectors like cosmetics are appearing that have bottomed and are rising," Kim noted. "You should invest with focus on 'Is this really a stock showing earnings improvement?'"
FAQ
Should investors choose Samsung Electronics or SK Hynix for semiconductor exposure?
Kim Ki-hoon of Epic Investment currently favors Samsung Electronics, citing the company's HBM4 sample unveiling and expected foundry profitability in the second half. While SK Hynix benefits from its upcoming ADR listing in the US, Kim states Samsung's technological advances in AI semiconductors may eliminate previous discount factors.
Is KOSPI 10,000 achievable according to market experts?
Kim believes KOSPI reaching 10,000 is possible, noting that this semiconductor cycle has greater sustainability than previous cycles yet remains undervalued. He explains that while foreign investors sold KOSPI stocks and the index rose, individual stock valuations actually fell, creating room for valuation expansion if supply-demand conditions improve.
Why has KOSDAQ underperformed KOSPI in recent market movements?
The performance gap reflects sector-specific weakness rather than market-wide issues, according to Kim. KOSDAQ's bio and secondary battery stocks, which carry large market cap weight, have shown weak returns, while semiconductor equipment stocks in KOSDAQ have performed well. Rising domestic interest rates also impacted KOSDAQ more significantly than KOSPI.
