SK Hynix Shareholders Sound Alarm: Target Stock Price Plummets 50% in Just 3 Months

SK Hynix and Morgan Stanley: A Tale of Two Reports

K Semiconductor’s stock price is reeling from an unfair report by foreign investment bank ⁢Morgan Stanley, ⁣which claimed memory semiconductors had peaked.

Some ⁣are pointing out that it is ‘self-contradictory’ that Morgan Stanley, which has drastically cut its investment opinion and SK Hynix’s target stock price, is giving a relatively positive assessment of the US’s Micron technology, which‌ is ranked third in memory.

SK Hynix’s Stock Price Falls

According ​to Korea Exchange on the 19th, SK Hynix’s stock price fell 6.14% after Morgan⁢ Stanley recently issued a de facto sell report. During the day, the drop increased to 11.12%. Samsung Electronics stock price also fell by 2.02%.

Recently, Morgan Stanley downgraded its​ investment opinion on SK Hynix by two levels⁤ from overweight to‍ underweight, pointing to a⁣ pick-up in⁤ memory semiconductors. The target stock price was also significantly lowered⁣ to 120,000 won from 260,000 won.

Contradictions in Morgan Stanley’s Analysis

However, it has been pointed ⁢out that there are many​ contradictions in⁤ Morgan Stanley’s analysis. This is because, although the long-term memory boom was assumed to be over, American memory company Micron was given a higher corporate value than SK Hynix.

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Recently, Morgan Stanley maintained the ⁣same weight (neutral) on⁣ Micron’s investment opinion as last June. The target stock price was also lowered from $140 to $100, but was set higher ⁣than Micron’s closing price when the report‌ was published.

SK Hynix’s Dominance in the HBM Market

In the global memory market, three companies, Samsung Electronics, SK Hynix and Micron, share the pie, and Korean companies have a ‍large market⁤ influence. In particular, ‌SK Hynix ‍is⁣ overwhelmingly first in the high-bandwidth memory (HBM) market, which is ​essential for‍ artificial intelligence (AI)⁤ accelerators.

According to Trend Force, as of last year, SK Hynix had the ⁣highest HBM market share at 53%. It is followed by Samsung Electronics ‌(38%) and Micron (9%).

Micron’s Valuation Burden

At the current⁤ stock price, Micron has‍ a higher valuation burden than SK Hynix. SK Hynix’s estimated price-to-earnings ratio (PER) for this year is just⁣ 7x. The estimated PER in 2025 is only 4.4 times.

On the other hand, ‌Micron’s estimated PER for‍ 2024 and 2025 ​is​ 145.4 times and 10.2 times, respectively.⁣ This means that the stock is significantly overvalued relative to profitability relative to SK Hynix.

JP Morgan’s Overweight Recommendation for HD Hyundai ⁢Electric

Meanwhile, the power equipment stock rose as JP Morgan⁢ HD gave Hyundai Electric an overweight‌ recommendation as an investment opinion. JP Morgan HD suggested a stock‍ target price of 370,000 for ‌Hyundai Electric.

On the 19th, HD Hyundai Electric’s stock‍ price‌ rose 11.82% to close at 317,000 won. Also, share prices of⁣ Hyosung Heavy Industries (10.88%),⁢ LS (5.85%), and LS Electric (5.79%) ​also rose.

Foreign investors actually increased their buying pressure due to the impact of the JP Morgan report. On this day, foreign investors bought 80.4 billion won⁣ worth of HD Hyundai​ Electric and‍ 7.7 billion won net of Hyosung Heavy Industries.

Market analysis shows that demand for‌ power ⁢facilities is⁣ more ‌sustainable than for semiconductors. Semiconductors are needed for learning AI programs or building data centers, but you have to have power to keep them‌ running.