SK Hynix, Weak Despite Strong Q2 Earnings Outlook

Despite Performance Expectations, Foreign and Institutional Investors Sell Off

[Asia Economy Reporter Song Hwajeong] Despite expectations for SK Hynix's second-quarter earnings this year, the stock price has struggled to escape its downward trend.

According to the Korea Exchange on the 20th, SK Hynix's stock price fell 2.6% from the beginning of this month to the previous trading day. In contrast, during the same period, the KOSPI rose 4.4%, and Samsung Electronics increased by 3.03%.

Simultaneous selling by foreigners and institutions pulled the stock price down. Foreign investors have net sold SK Hynix for eight consecutive trading days recently, and institutions have continued net selling every day this month except for two days. Institutions sold SK Hynix shares worth 368 billion KRW during this period, making them the largest net sellers. Foreigners sold 225.6 billion KRW worth. The foreign ownership ratio dropped from 48.66% at the end of last month to 48.28%.

SK Hynix's second-quarter earnings are expected to exceed market expectations. According to financial information provider FnGuide, the consensus for SK Hynix's second-quarter earnings is sales of 8.2579 trillion KRW, a 27.9% increase year-on-year, and operating profit of 1.7398 trillion KRW, a 172.87% increase. Many forecasts suggest the actual results will surpass the consensus. Kim Unho, a researcher at IBK Investment & Securities, analyzed, "SK Hynix is expected to record second-quarter sales of 8.161 trillion KRW and operating profit of 1.9 trillion KRW, which is somewhat better than expected. Operating profit is expected to more than double compared to the first quarter, with profitability improvement anticipated due to increased volume and rising average selling price (ASP)."

Despite the positive outlook for second-quarter earnings, the stock price is not rising due to pressure from declining DRAM prices. Park Yooak, a researcher at Kiwoom Securities, said, "Due to supply from equipment expansion and the seasonal off-season for demand, DRAM price decline pressure will increase in the third quarter. Although a significant portion of the adjustment due to concerns about the DRAM market has already occurred, the market's still-high earnings expectations will be revised downward once more before a full-fledged rebound is attempted."

This content was produced with the assistance of AI translation services.