Shinhan sees KOSPI operating-profit growth slowing from 38.2% in 2027 to 9.5% in 2028

Shinhan Securities projects KOSPI operating profit of 1,338 trillion won in 2027, up 38.2% from 2026, led by semiconductors. But its Nov. 6 quant and ETF outlook projects growth slowing to 9.5% in 2028, taking operating profit to 1,465 trillion won.

That deceleration is already part of the forecast. It is not a separate downside scenario, and slower growth would still leave profits higher.

AI investment: growth, composition and timing

A separate economic outlook, also dated Nov. 6, projects total capital expenditure by the major hyperscalers it covers at about $1.07 trillion in 2027, using company guidance and consensus estimates. The measure is aggregate capital expenditure, rather than a separately identified AI-only spending total.

Year-on-year growth in that spending is projected to fall from 109% in the fourth quarter of 2026 to 20% in the fourth quarter of 2027. The annual dollar increase narrows from about $400 billion in 2026 to about $290 billion in 2027. Spending keeps rising, but more slowly.

The outlook also distinguishes spending on equipment from construction and power infrastructure. It links equipment purchases to Korean and Taiwanese exports, while identifying construction as a channel supporting U.S. domestic production and income.

The timing differs, too. Equipment installation could remain substantial in 2028, according to the economic outlook. Slower aggregate spending growth therefore does not by itself explain the quant report’s projected earnings slowdown.

Regulation is a separate consideration. In its Nov. 6 weekly economic check-up, the brokerage identifies permitting and power costs as potential constraints on the pace of AI investment. These are risks to execution, rather than proof that spending will fall.

Assumptions behind the earnings forecast

The projected earnings expansion includes growth outside semiconductors. Chip operating-profit growth is expected to slow from 49.3% in 2027 to 9.0% in 2028. Non-chip growth rises from 10.6% to 11.2% over the same period, overtaking chips in percentage terms in 2028.

The projected 11.2% increase in non-chip operating profit is already included in the 9.5% KOSPI growth estimate for 2028.

Domestic demand provides another channel. The economic outlook forecasts Korean GDP growth of 3.0% in 2027 and expects semiconductor earnings to support corporate investment and household consumption.

Risks to the forecast

The earnings measures cover different forecast periods. The quant report says 12-month forward net-profit estimates have continued to rise, while the earnings-revision ratio for FY2027 estimates has declined from its second-half peak. A weaker revision measure does not mean estimates have begun falling.

Profit durability is another issue. The emerging-markets strategy distinguishes Korea’s memory-chip exposure from Taiwan’s foundry business, pointing to greater uncertainty about the persistence of memory-sector earnings.

October’s export gains were much stronger in semiconductors than in other products. Korea’s exports rose 93.7% year on year, according to the trade ministry’s Nov. 1 release. Semiconductor exports rose 259%, while exports excluding semiconductors increased 34%.

Financing presents a further risk in the economic outlook. If AI investment returns are delayed and lenders serving both AI and non-AI borrowers lose lending capacity, borrowers outside AI could also struggle to refinance. In the Nov. 6 report, the brokerage said there were not yet signs of distress spreading through the financial system.