Brokerages rushed to cut target prices during last week’s three-day rout, but because Samsung Electronics and SK Hynix shares fell so sharply, even after the subsequent rebound, average target prices still sit at roughly double current levels.<\/p>\n
According to financial information provider Yonhap Infomax on Sunday, Samsung Electronics closed at \u20a9262,500 ($182.73) on July 31. The average target price from brokerages over the past month stood at \u20a9514,545 ($358.16) \u2014 meaning the market’s expected target is 96% above the current share price.<\/p>\n
Among the 11 brokerages that issued Samsung Electronics targets during July, Korea Investment & Securities set the highest at \u20a9650,000 ($452.46) on July 31. DB Financial Investment set the lowest at \u20a9360,000 ($250.59) the same day. Most brokerages maintained “Buy” ratings, while Eugene Investment & Securities kept its highest rating of “Strong Buy.”<\/p>\n
In a July 31 report, Eugene Investment & Securities analyst Sohn In-joon noted that Samsung Electronics’ conference call “presented long-term supply agreement (LTA) target volumes larger than expected.” He added, “Ahead of executing shareholder returns exceeding \u20a9100 trillion ($69.6 billion), we expect demand for treasury stock purchases to fund employee performance bonuses. Expectations for share buybacks should stabilize supply-demand dynamics for memory stocks experiencing extreme volatility and enable a share price recovery.”<\/p>\n
For SK Hynix, last week’s closing price was \u20a91,718,000 ($1,195.88). The gap ratio versus the one-month average target of \u20a93,371,538 ($2,346.59) was also 96%. Among 13 brokerages that issued SK Hynix targets last month, Korea Investment & Securities had the highest at \u20a94.7 million ($3,271.61) on July 30, while BNK Investment & Securities had the lowest at \u20a91.48 million ($1,030.21) on July 29.<\/p>\n
BNK Investment & Securities analyst Lee Min-hee cut SK Hynix’s target from \u20a91.85 million ($1,287.76) while maintaining a “Hold” rating. Lee said, “Despite demand momentum peaking, companies are pursuing aggressive capacity expansion,” adding, “Concerns over a shift to oversupply are significant.” He also noted, “The successful listing of China’s CXMT at the peak of the cycle is having a negative impact in terms of intensifying competition.”<\/p>\n
Concerns that the semiconductor cycle has peaked have persisted, and last week brought a string of negative catalysts. News that China has begun producing semiconductor lithography equipment, CXMT’s listing on the Shanghai Stock Exchange, and SK Hynix’s second-quarter results missing market expectations all weighed on investor sentiment.<\/p>\n
With Samsung Electronics and SK Hynix shares plunging for three consecutive sessions \u2014 the so-called “three dark days” \u2014 brokerages responded by lowering their upside estimates for both stocks.<\/p>\n
On July 29, Mirae Asset Securities cut its targets for Samsung Electronics and SK Hynix by 33% each, from \u20a9550,000 ($382.85) to \u20a9370,000 ($257.55) and from \u20a94.2 million ($2,923.57) to \u20a92.8 million ($1,949.05), respectively. Mirae Asset analyst Kim Young-geon explained, “We judged that the correction from lower NAND contract price forecasts had run its course, but the China lithography localization issue immediately followed. While the industry-wide decline appears excessive, target adjustments were unavoidable.”<\/p>\n
Shinhan Investment Corp. also lowered Samsung Electronics’ target from \u20a9590,000 ($410.69) to \u20a9450,000 ($313.24) and SK Hynix’s from \u20a94.2 million ($2,923.57) to \u20a92.7 million ($1,879.44). Samsung Securities cut targets for both Samsung Electronics (\u20a9500,000 to \u20a9400,000) and SK Hynix (\u20a93.5 million to \u20a93 million). However, Samsung Securities analyst Lee Jong-wook diagnosed that “the aggressive share price correction stems not from peak-out concerns but from excessive investment crowding ahead of the memory boom.”<\/p>\n
Kiwoom Securities lowered SK Hynix’s target from \u20a92.6 million ($1,809.83) to \u20a92.2 million ($1,531.39) while upgrading its rating from “Market Perform” to “Buy.” Kiwoom analyst Park Yu-ak said, “Concerns we’ve previously raised are now substantially reflected in the share price, and considering 2027\u20132028 high-bandwidth memory (HBM) earnings growth, valuations have entered an attractive range,” expressing expectations for a short-term rebound. Daishin Securities, Hanwha Investment & Securities, and NH Investment & Securities also cut SK Hynix targets.<\/p>\n
In contrast, Korea Investment & Securities was effectively the only brokerage to raise targets on both stocks last week. It lifted Samsung Electronics’ target from \u20a9590,000 ($410.69) to \u20a9650,000 ($452.46) and SK Hynix’s from \u20a93.8 million ($2,645.13) to \u20a94.7 million ($3,271.61).<\/p>\n
Korea Investment & Securities analyst Chae Min-sook said, “While the market reflects skepticism, solid fundamentals are being proven through earnings. This is the time to focus on the direction of corporate value and profits rather than short-term share price fluctuations.” DB Financial Investment also raised its SK Hynix target from \u20a91.75 million ($1,218.15) to \u20a92 million ($1,392.18).<\/p>\n
CategorySamsung ElectronicsSK HynixRecent close (July 31)\u20a9262,500 ($182.73)\u20a91,718,000 ($1,195.88)Average target (past month)\u20a9514,545 ($358.16)\u20a93,371,538 ($2,346.59)Gap ratio96%96%Highest target\u20a9650,000 (Korea Investment & Securities)\u20a94.7 million (Korea Investment & Securities)Lowest target\u20a9360,000 (DB Financial Investment)\u20a91.48 million (BNK Investment & Securities)<\/p>\n
Note: The gap ratio represents the percentage by which target prices exceed current share prices.<\/p>\n
Meanwhile, SK Hynix’s American depositary shares (ADS) listed on the Nasdaq closed at $143.73 on July 31, down 3.54% from the prior session. Given that one ADS represents one-tenth of a common share, this implies a level approximately 21% above last week’s closing price of \u20a91,718,000 ($1,195.88) for the underlying shares in South Korea.<\/p>\n
Mirae Asset Securities managing director Seo Sang-young explained, “When the underlying shares hit the daily limit up in the Korean market, the ADS initially rose over 9% in early trading. However, Japan’s Kioxia announced weaker-than-expected results and guidance, which stoked concerns about slowing NAND price momentum and drove the ADS into negative territory.”<\/p>\n
SK Hynix ADS listed on July 10 at an offering price of $149, then surged 27.29% on July 14 to as high as $193.92. At that point, the premium over the underlying Korean shares’ then-price of \u20a91,913,000 reached 46%.<\/p>\n","protected":false},"excerpt":{"rendered":"Brokerages rushed to cut target prices during last week’s three-day rout, but because Samsung Electronics and SK Hynix…\n","protected":false},"author":2,"featured_media":106518,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[42520,645,6670,987,11697,1550,276,984,39010,241,275,54940],"class_list":["post-106517","post","type-post","status-publish","format-standard","has-post-thumbnail","category-sk-hynix","tag-bnk-investment-securities","tag-cxmt","tag-db-financial-investment","tag-kiwoom-securities","tag-korea-investment-securities","tag-mirae-asset-securities","tag-samsung-electronics","tag-samsung-securities","tag-shinhan-investment-corp","tag-sk","tag-sk-hynix","tag-yonhap-infomax"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/106517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=106517"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/106517\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/106518"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=106517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=106517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=106517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}