Business
S Korea stocks crush global benchmarks with best stock rally since 1999
The Kospi Index has soared 76% this year, compared with the S&P 500’s 17% advance so far and MSCI Asia Pacific Index’s 25% gain. The Korean benchmark’s performance, the best among major equity gauges, has been helped by chip heavyweights Samsung Electronics and SK Hynix as well as defence and nuclear firms.
Analysts see further upside ahead, with Citigroup, JPMorgan Chase and Nomura Holdings are among brokers forecasting at least another 20% climb next year. Strong earnings growth should bolster that upward trajectory, analysts add.
The biggest artificial intelligence winners weren’t conventional chipmakers or large-cap names but proxy plays. That includes power transformer maker Hyosung Heavy Industries and nuclear power provider Doosan Enerbility, which saw shares up more than 320% each this year, according to Korea Exchange.
Despite their high valuations, bulls argue that there’s no quick carbon-free alternative to meet surging power demand of AI data centers, making these players indispensable.
Investor interest in power grid and infrastructure stocks should continue into 2026, according to Morgan Stanley analysts. Among them, HD Hyundai Electric Co. is entering “a multi-decade re-rating as grid modernization, AI data center, and decarbonization converge,” they said.
Agencies
Memory Bulls
Samsung and SK Hynix had a standout year, cementing their status as Kospi heavyweights and the world’s top manufacturers of memory chips. Thanks to growing demand from global tech giants for specialized, high-performance chips, Samsung has jumped 125% this year to an all-time high. SK Hynix rose about 270%.
The momentum has spilled over into related firms like SK Hynix’s parent SK Square Co. and Korea Circuit Co., which counts Broadcom Inc. as its customer. Both stocks are up more than 330% each.
“Shortages in memory chips are unquestionably taking hold so I expect an extremely strong year for Korean semiconductor stocks,” said Kang DaeKwun, chief investment officer at Life Asset Management in Seoul.
Defense Stars
President Donald Trump’s reshaping of traditional security alliances spurred new defense spending across Europe and Asia this year, driving renewed interest in Korean contractors known for delivering weapons faster and at lower cost.
Hanwha Aerospace Co., maker of the K9 self-propelled howitzer, emerged as one of the biggest winners, with shares up nearly 200% this year. Shipbuilder Hanwha Ocean Co. has jumped 204%.
Must Asset Management says that given recent success by local companies making inroads in Europe, these firms will likely see more partnerships in coming years among NATO members.
K-Beauty Leaders
Less than two years after its IPO, APR Corp. has leapfrogged beauty giants Amorepacific Corp. and LG H&H Co. in market value. Up 362%, the Medicube maker and at-home beauty device leader topped stock gains in the MSCI Korea Index.
“To me, APR’s outperformance isn’t just about better execution. It’s about playing a different game,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global in Singapore. “It sells outcomes and experiences through social-first channels, not just skincare through traditional retail.”
LG H&H, the company behind The Whoo skincare brand, recorded a fifth consecutive year of stock declines, while Amorepacific has risen 14% this year. Investors say that expectations are high for APR to continue outperforming, though its high valuation makes the stock vulnerable to sharp swings if setbacks occur.
Losing Games
Despite Korea’s broad market rally, game developers were notably left behind. Krafton Inc., has lost about one-fifth of its market value while Com2uS Corp. shed more than one-third. Worries about their limited appeal in Asia and inability to compete with Chinese rivals have forced investors to look elsewhere.
With demand for Korean role-playing games constrained in Asia, the upside remains limited, according to Life Asset’s Kang.
Other equity market loser standouts include electric vehicle supply chain companies hit by dwindling demand for EVs. Before Ford Motor Co. ended its partnership with one of Korea’s biggest battery makers, widening technological gaps with Chinese rivals had already weighed on the sector. Among the biggest losers is Enchem Co., which saw shares slump about 50%. Shares of SK Innovation Co., one of South Korea’s three main battery suppliers, ended the year in the red.
