With SK hynix having released record first-quarter results, attention is turning to the stock's future direction. Typically, immediately after an earnings release, profit-taking leads to a pullback in the share price. But Samsung Electronics, which delivered an earnings surprise early this month, managed to close higher on the day of the announcement, and the stock has since climbed vertically from the 190,000-won range to the 220,000-won range. Focus is on whether SK hynix can carry this upward momentum as well.
According to the Korea Exchange (KRX) on the 23rd, SK hynix closed the day at 1,225,000 won, up 0.16% (2,000 won) from the previous session.
Before the market opened, SK hynix disclosed that first-quarter operating profit came to 3.76103 trillion won. That figure soared 405% from a year earlier. Revenue also rose 198% from a year earlier to 5.25763 trillion won, marking the largest quarterly results since the company's founding.
The share price reacted immediately to the record results in early trading. Right after the open, SK hynix spiked to 1,267,000 won, setting an all-time high. But as profit-taking flooded in, it turned lower and at one point in the afternoon slipped to 1,183,000 won, before late buying flowed in and the stock ultimately finished slightly higher.
Despite the blockbuster results, analysts said the share price underperformed relative to expectations because operating profit fell short of the securities industry's hoped-for "40 trillion won."
According to FnGuide, the first-quarter operating profit consensus (the market's average forecast) for SK hynix was 3.63955 trillion won. While the company beat the consensus, in recent days the securities industry had issued a series of bold projections, including expectations for "40 trillion won" in operating profit. Earlier, Yuanta Securities Korea projected 4.04 trillion won in operating profit for SK hynix in the first quarter. KB Securities and Samsung Securities also projected 4 trillion won and 4.02 trillion won, respectively.
As a result, attention is on whether SK hynix can continue rising, following Samsung Electronics. Generally, optimism ahead of an earnings release lifts shares up to the announcement, after which profit-taking often pours in on the day.
But this year, Samsung Electronics showed a different pattern. On the 7th, Samsung Electronics disclosed that preliminary first-quarter operating profit came to 5.72 trillion won. The figure surged 755% from a year earlier and exceeded the consensus by as much as 50%, which instead gave the stock momentum. In fact, Samsung Electronics gained 1.76% on the day of the results to close at 196,500 won. It has continued to rise since, reaching the 220,000-won level on this day.
Some analysts said SK hynix effectively beat the consensus when factoring in whether to accrue performance bonuses. Kim Dong-Won, head of research at KB Securities, said, "In the case of SK hynix, it must pay 10% of operating profit as year-end performance bonuses, so a provision for performance bonuses, which is expensed in advance, was reflected," adding, "If you view the first quarter on an adjusted operating profit basis excluding such one-off expense items, the company effectively recorded 4.2 trillion won, delivering a genuine earnings surprise."
Some also say the rally in large-cap semiconductor stocks will continue. The artificial intelligence (AI) cycle is bound to keep providing a boost, and results are expected to back it up.
Lee Jong-uk, an analyst at Samsung Securities, said, "The memory chip market is experiencing a supply shortage, and neither supply nor demand is changing," explaining, "It is hard to resolve the shortage, and there is no sign of demand declining."
Kim said, "The AI industry is still moving past the initial stage," adding, "We have moved from generative AI into the agent AI era, so there are more than three to four years of growth ahead, followed by the physical AI era." He projected that results would continue to trend upward through the fourth quarter of this year, with the first quarter as the bottom.
Foreign investors' buying of Samsung Electronics and SK hynix is also expected to continue. Among emerging markets, Korea is the cheapest market relative to profitability, and in the domestic market, large-cap semiconductor stocks have overwhelmingly strong growth potential.
Kim said, "When foreign investors build portfolios in emerging markets, Korea is currently the cheapest country relative to return on equity (ROE) profitability," adding, "They have little choice but to include the Korean market, and it will be hard to exclude Samsung Electronics and SK hynix, which together account for half of KOSPI market capitalization."