BNK Investment & Securities, which has maintained the most conservative view among Korea's securities firms on SK hynix, lowered its target price again to 14.8 million won. It is the lowest target among brokerage reports published so far.
On the 30th, BNK Investment & Securities kept its investment opinion on SK hynix(000660) at "Hold" and cut the target price to 14.8 million won from 18.5 million won. The upside from the close on the 29th (1,401,000 won) is only about 5.6%.
Lee Min-hee, an analyst at BNK Investment & Securities, said, "In the short term, it has entered an oversold phase, but with demand likely to slow in the second half, the rebound in the share price will also be limited."
BNK Investment & Securities drew attention this year as the first among Korea's securities firms to withdraw a "buy" rating on SK hynix. Even when SK hynix shares were nearing 3 million won last month, it kept the target price at 1.85 million won, presenting the most conservative outlook in the securities industry. The latest 1.48 million won target is also the lowest among brokerage targets announced to date.
The analyst also assessed that SK hynix's second-quarter results released that day fell short of market expectations.
SK hynix posted record results in the second quarter with revenue of 7.93187 trillion won and operating profit of 6.05426 trillion won, but BNK Investment & Securities analyzed that they were 5% and 6% below the market consensus, respectively.
The analyst said, "In the first quarter, per-chip cost increases were higher than expected, and in the second quarter, due to the product mix, the rise in the average selling price (ASP) of DRAM was lower than expected."
It also judged that it is hard to be optimistic about the second-half industry conditions.
The analyst said, "With consumer spending slowing, spot prices for NAND have turned downward, and the OECD leading indicator is also declining," and added, "As hyperscalers shift their AI investments to emphasize expense efficiency, concerns are growing over funding investment resources amid rising interest rates and instability in funding markets."
On top of that, the continued aggressive capacity expansion stance by memory makers was cited as a burden.
The analyst said, "Despite slowing demand, manufacturers are announcing large-scale expansions one after another on optimism about long-term demand, raising significant concerns about a future shift to oversupply," and evaluated, "The successful initial public offering (IPO) of China's CXMT is also a negative factor in terms of intensifying competition."
The analyst added, "The current share price has fallen to the bottom of the valuation band, putting it in a short-term oversold phase, but since corporations' expansion stance is unlikely to change easily, the second-half demand slowdown is likely to continue," and forecast, "The share price rebound will also be limited."