Has SK Hynix Hit the Bottom?

Yield Since Early Year -17%
Due to Poor Business Conditions...Expectations for Q4 Performance

[Asia Economy Reporter Park Jihwan] SK Hynix's stock price has not been able to escape its weakness. Due to continued poor performance caused by falling prices of its main product group, memory semiconductors, there is no sign of a stock price rebound. Experts predict that memory semiconductor prices will rise again as early as the fourth quarter, as major customers begin to secure inventory.

According to the Korea Exchange on the 14th, SK Hynix showed a negative 17% stock return since the beginning of the year among the top 10 KOSPI market capitalization stocks as of the closing price on the 11th. During this period, LG Chem (122%) and Kakao (147%) showed increases of over 100%. Samsung SDI (82%), Samsung Biologics (76%), Celltrion (65%), and NAVER (64%) also showed unusually high growth rates. Samsung Electronics, grouped in the same industry, rose by 6%.

The reason for SK Hynix's weak stock price is largely due to the sluggish memory semiconductor market. SK Hynix is expected to record sales of 7.795 trillion KRW and operating profit of 1.234 trillion KRW in the third quarter of this year. Compared to the previous quarter, sales decreased by 9.4% and operating profit by 36.6%. This is closely related to the gradual decline in memory semiconductor prices. The average selling prices (ASP) of DRAM and NAND flash in the third quarter are expected to be 8% and 9% lower than the previous quarter, respectively.

In the financial investment industry, the general view is that SK Hynix's current stock price level already reflects the worst-case scenario. It is expected that memory semiconductor prices will rebound as early as the fourth quarter. This is because major customers such as cloud companies are expected to have depleted semiconductor inventories secured in preparation for COVID-19 in the third quarter and will start purchasing semiconductors again. From the fourth quarter, when inventory levels of upstream companies normalize, recovery signals from increased shipments will appear, leading to a rebound in memory semiconductor prices.

Choi Doyeon, a researcher at Shinhan Financial Investment, emphasized, "The bottom of SK Hynix's stock price is already considered to have passed, and stock price increases due to shipment recovery are expected in September to October. Although macro issues such as the spread of COVID-19 and the US-China trade dispute are concerns, the possibility of further stock price declines appears limited."

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