Against the Tide! Morgan Stanley Upgrades South Korean Stock Market to "Overweight," Aiming for 9,000 Points

BlockBeats News, August 3, Morgan Stanley upgraded the South Korean stock market to "Overweight" with a target price of 9000 points, implying a 36% upside potential from the current level.

Morgan Stanley believes that the previous intense deleveraging is coming to an end, with KOSPI valuation hitting a historically low level, providing investors with a more attractive entry point. Their data shows that hedge funds have completed about 75% of the deleveraging process, leveraged ETFs have seen a 70% reduction from their peak, and the chip structure has significantly improved.

Morgan Stanley's Asia tech team leader, Shawn Kim, highlighted three recent catalysts for South Korean chip stocks.

First, Capital Expenditure. The capital management plans of Samsung Electronics and SK hynix are seen as the most important recent catalyst. The market is eagerly awaiting specific announcements from the two companies regarding their "value enhancement" plans and capital return strategies. The timing is not yet clear, but the expectation itself is seen as a potential catalyst.

Second, HBM4 Pricing. Samsung Electronics recently stated that HBM4 is expected to account for about 60% of its HBM total sales by the end of next year. If the price of HBM4 exceeds $3 per Gb as expected by the market, it will have a positive impact on overall DRAM pricing from 2026 to 2027.

Third, iPhone 18 Release Cycle. Mobile devices still account for 30% to 40% of global DRAM demand and 25% to 30% of NAND demand. According to feedback from Korean Apple supply chain members (such as LG Innotek), Apple has a positive outlook on the iPhone 18 cycle, with expected year-on-year shipment growth of 5% to 10%. The iPhone 18 is set to be released in September, with the initial models being part of the Pro series (including Pro, Pro Max, and foldable screen models). If the sales performance is strong, it will have a positive impact on Samsung Electronics and SK hynix.