Samsung Electronics and SK Hynix Run Again as Foreigners Turn Away

This Month's 2nd and 4th Top Net Bought Stocks... Breaking Last Month's Lows and Showing Price Recovery Trends

[Asia Economy Reporter Song Hwajeong] Samsung Electronics and SK Hynix, which led the stock market correction last month, are gradually recovering their stock prices. This is thanks to foreign investors, who had turned their backs, now returning to buying. However, due to the decline in DRAM prices, the short-term outlook remains negative, making it difficult to expect a rapid recovery in stock prices.

As of 9:10 a.m. on the 7th, Samsung Electronics was trading at 76,500 KRW, down 800 KRW (1.03%) from the previous day. Although it closed the previous day recovering to the 77,000 KRW range, it showed weakness on this day due to the burden from recent price increases. Samsung Electronics has risen 6.33% compared to the yearly low of 72,700 KRW recorded on the 20th of last month. SK Hynix also started the day weak, trading at 105,000 KRW, down 1,000 KRW (0.94%) from the previous day. SK Hynix has risen more than 5% compared to the yearly low of 100,500 KRW recorded on the 12th of last month.

Due to concerns over the semiconductor industry, foreign investors massively sold off last month, causing Samsung Electronics to fall below the 80,000 KRW level and SK Hynix to drop below 100,000 KRW during trading, experiencing a significant correction. The decline of these leading stocks led to a broader market correction.

After hitting yearly lows, Samsung Electronics and SK Hynix began to recover as foreign selling pressure eased. Since the beginning of this month until the day before, foreign investors have purchased 423.7 billion KRW worth of Samsung Electronics shares, making it the second most net-bought stock after KakaoBank. They have bought shares for five consecutive trading days recently. SK Hynix was net-bought by 139.7 billion KRW, ranking fourth in net purchases. Except for one day this month, it has been net-bought every day. Previously, foreign investors sold off 6.4696 trillion KRW of Samsung Electronics and 1.5426 trillion KRW of SK Hynix shares last month.

Although showing signs of recovery, given the unfavorable industry conditions, it seems difficult to fully recover the losses in a short period. The increase in PC shipments driven by strong set replacement demand since last year has recently come to a pause, and server companies' inventory has temporarily increased, causing DRAM prices to decline recently. Agyujin, a researcher at DB Financial Investment, said, "Reflecting the downward revision of earnings estimates due to the short-term decline in DRAM prices, we are lowering Samsung Electronics' target price from 110,000 KRW to 100,000 KRW. However, we believe the current DRAM price decline cycle will last about three quarters, shorter than usual, and will enter an upward trend again after the third quarter of 2022, maintaining mid- to long-term earnings growth." DB Financial Investment also lowered SK Hynix's target price from 170,000 KRW to 140,000 KRW.

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