[Click eStock] "SK Hynix, Q2 Earnings Estimates Revised Downward"

BNK Investment & Securities Report
Target Price Revised Down by 17%

[Asia Economy Reporter Minji Lee] BNK Investment & Securities maintained its buy rating on SK Hynix on the 6th and set a target price of 135,000 KRW, down 17% from the previous target.

SK Hynix's operating profit for the second quarter is expected to be 3.99 trillion KRW, 11% lower than previous expectations. This is because demand weakness likely resulted in lower bit growth than anticipated, and the reduction in inventory days for the second quarter is expected to be less than initially forecasted. Although there was no one-time DRAM sales warranty provision (380 billion KRW) in the previous quarter and the exchange rate rose this quarter, the profit is still projected to be lower than expected.

Minhee Lee, a researcher at BNK Investment & Securities, said, "Micron, which recently announced its earnings, also saw inventory days decrease by 9 days to 111 days compared to the previous quarter, indicating that the peak has passed, but its sales guidance weakened," adding, "The high inventory levels will continue for some time, exerting downward pressure on memory prices in the second half."

Due to the sharp cooling of consumer sentiment, growth expectations for the PC, smartphone, and TV markets this year are analyzed to decline by 5-10%. This situation is similar to the early stages of past financial crises or the COVID-19 pandemic. Since client companies are trying to reduce their inventory in response to uncertain demand in the second half, there is expected to be no seasonal effect this year.

However, researcher Minhee Lee noted, "The stock price has also reached a historical low," and added, "Going forward, it is likely to react more sensitively to positive news than negative news, so it is advisable to maintain the buy rating."

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