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Korea Investment & Securities Recommends Combining IT Giants with Cyclicals for September
Electronic Technology · Semiconductors · yonhap_finance · 2026-08-31
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Korea Investment & Securities suggests a balanced portfolio strategy for September, favoring IT heavyweights alongside cyclicals showing strong earnings growth.
What Happened
Market Valuation Analysis: Korea Investment & Securities notes that the KOSPI's 12-month forward P/E ratio of 5.5x is significantly lower than the historical average of 10x. The current stock price level is seen as having already priced in a substantial downward adjustment in earnings estimates.
Earnings Improvement Trends: Approximately 57% of companies exceeded Q2 operating profit expectations, with earnings growth spreading beyond IT into sectors like energy, finance, and industrials. Even excluding major semiconductor players, overall profit margins remain robust compared to historical levels.
Semiconductor Sector Outlook: Analysts believe the Korean stock market is reacting too quickly to concerns regarding a semiconductor industry slowdown. Despite potential future downward revisions in earnings, the current valuation is considered low enough to offer a buffer.
Portfolio Strategy: The firm recommends maintaining a neutral or higher weight in semiconductors while incorporating cyclical sectors that demonstrate clear earnings recovery. This dual approach aims to capture growth as performance improvements broaden across the market.