[Click eStock] "SK Hynix, Low Price Buying Opportunity... Expectations for the Second Half"
BNK Investment & Securities Report
On the 17th, BNK Investment & Securities analyzed that although semiconductor demand remains sluggish for SK Hynix, a restocking cycle can be expected in the second half of the year. The investment opinion was maintained as Buy, with a target price of 128,000 KRW.
Minhee Lee, a researcher at BNK Investment & Securities, stated, "Due to intense inventory adjustments by clients, chip manufacturers are suffering from a double burden of shipment declines (leading to record-high inventory levels) and sharp price drops, resulting in deteriorating earnings." However, she added, "The worse the semiconductor companies' earnings become, the faster the inventory adjustment within the supply chain is progressing."
She forecasted first-quarter sales of 4.95 trillion KRW and an operating loss of 3.32 trillion KRW. This sales estimate represents a 59% decrease compared to the same period last year. Lee analyzed, "The deficit could widen further depending on the scale of inventory valuation losses."
She predicted, "SK Hynix's inventory is expected to peak in the first quarter of this year. Although there will be additional inventory adjustments by server customers in the second quarter, shipments are expected to increase and inventory decrease due to improved demand in the information technology (IT) sector." She also noted, "Meaningful shipment growth is anticipated from the end of the second quarter, when server inventory adjustments conclude, and SK Hynix is expected to benefit from the most aggressive production shift to DDR5 (accounting for 30% at the end of the first quarter)."
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Lee emphasized, "Despite normalized set inventory, semiconductor demand remains weak due to uncertain consumer conditions and financial tightening. However, if interest rate hikes cease and the recent economic recovery trend continues, a restocking cycle can be expected in the second half of the year." She added, "The current stock price already reflects all risks and presents a buying opportunity at a low price."
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