Shinhan flags funding risk as brokers play down data-centre restrictions

Concerns over US data-centre restrictions were excessive, according to analyses from Hanwha Investment & Securities and Daishin Securities. But Shinhan Securities warned on Nov. 11 that unresolved permitting and financing uncertainty could threaten the semiconductor earnings behind its conditional KOSPI valuation benchmark of 4,800.

The KOSPI rose 2.60% to close at 5,375.36 on Nov. 11. In KRX regular-session trading, Samsung Electronics gained 3.57% to 206,000 won and SK hynix advanced 5.36% to 1,277,000 won. Separately, the Ministry of Finance and Economy’s Daily Economic Indicators, accessed Nov. 12, put the Nov. 11 won-dollar closing rate at 1,333.6 won per dollar.

Do restrictions mean projects will stop?

The Texas approval constraints predated the midterm elections. Governor Greg Abbott’s Aug. 3 directive required an audit of data centres in the state’s grid-interconnection process before projects could advance. That announcement does not establish whether the audit had been completed by Nov. 11.

In her published campaign policy, Gina Hinojosa called for a moratorium until lawmakers enacted protections giving residents a say over whether and how data centres enter their communities. The pledge extended beyond household electricity bills and did not guarantee approvals would resume immediately after legislation passed.

In its Nov. 11 analysis, Hanwha interpreted the prospect of protective legislation as a possible route to easing the bottleneck. Its analysts estimated that about 75% of US data-centre capacity scheduled for completion in 2027 was already under construction and expected the main impact of restrictions to fall on projects due in 2028 or later. The construction figure alone does not rule out delays to 2027 projects.

A Nov. 10 analysis from Daishin reported that Morgan Stanley, UBS and Jefferies viewed tighter rules as more likely to delay projects than halt them.

Why is 4,800 conditional?

The valuation assumes 2027 earnings materialise but assigns no value to excess profits from 2028 onward. In Shinhan’s model, those 2027 earnings add to book value after dividends and other outflows. The brokerage discounts projected book value using an assumed 11.5% cost of equity. The resulting 4,800 level is a conservative valuation benchmark, not a firm market floor or its base-case target.

Doubts about 2028 semiconductor prices and margins therefore differ from a reduction in 2027 orders and shipments. If concerns over 2028 pricing lead to cuts in 2027 shipment forecasts, projected earnings and book value would fall. Its analysts said that would require recalculating the 4,800 estimate.

The question is whether permitting or financing problems disrupt the orders and shipments underpinning 2027 earnings. A rise in the index alone does not establish that the earnings assumption holds. The report identified the January 2027 earnings season as a checkpoint for possible spillover from weaker 2028 expectations into 2027 forecasts.

Where does recurring funding risk arise?

A separate July 10 analysis by Hana Securities addressed the financing burden beyond initial construction. It described companies using corporate bonds and structured finance to fund investment, and estimated AI servers’ economic life at two to three years.

The estimate concerns economic usefulness, not a fixed timetable for replacing every server. The brokerage warned of recurring equipment maintenance and replacement spending and greater funding risk for companies slower to monetise AI.