Samsung Electronics and SK Hynix Raised Up to 110,000 and 175,000 Won
Institutional Selling Pressure... Down 1.28% and 1.91% This Year
KOSPI Falls 1.87%, Breaking Below 2,900 Due to Leading Stocks' Weakness
[Asia Economy Reporter Song Hwajeong] Samsung Electronics and SK Hynix saw their target stock prices raised one after another from the beginning of the year, raising expectations for this year's stock price trends. However, they have continued to show sluggish performance, falling short of expectations.
According to the Korea Exchange on the 17th, Samsung Electronics fell 1.28% and SK Hynix fell 1.91% respectively up to the previous trading day this year. Due to the poor performance of these two leading stocks, the KOSPI has also continued its weak trend. During the same period, the KOSPI fell 1.87%. On this day, the KOSPI fell below the 2900 mark for the first time this year. It is the first time since December 2 of last year that the KOSPI has dropped below 2900.
Last month, Samsung Electronics rose 9.82% and SK Hynix rose 14.91%, raising expectations that they would recover from last year's sluggishness. Supporting these expectations, target stock prices were raised one after another from the beginning of the year. Seven securities firms raised the target price for Samsung Electronics, and six securities firms raised the target price for SK Hynix. Korea Investment & Securities and NH Investment & Securities raised Samsung Electronics' target price from 100,000 won to 105,000 won each, Hanwha Investment & Securities raised it from 105,000 won to 110,000 won, and Shinhan Financial Investment raised it from 96,000 won to 105,000 won. For SK Hynix, Korea Investment & Securities raised the target price from 145,000 won to 160,000 won, and Shinhan Financial Investment raised it from 150,000 won to 175,000 won. KTB Investment & Securities raised it from 135,000 won to 170,000 won. In addition, foreign investment bank (IB) Goldman Sachs upgraded SK Hynix's investment opinion from 'neutral' to 'buy' and raised the target price from 120,000 won to 170,000 won. Goldman Sachs also raised Samsung Electronics' target price from 100,000 won to 107,000 won.
Institutional selling pressure held back the stocks. Institutions sold the most Samsung Electronics this year, net selling 1.8168 trillion won, followed by SK Hynix with 552.7 billion won. Institutions showed a selling trend for these two stocks every day except for one day this year. Foreigners and individuals bought Samsung Electronics with 1.1485 trillion won and 660.6 billion won respectively, defending the price, but it was not enough to lift the stock price.
Samsung Electronics' fourth-quarter earnings last year falling short of expectations also had a negative impact on the stock price. Samsung Electronics announced its preliminary fourth-quarter earnings on the 7th. On a consolidated basis, fourth-quarter sales increased by 2.73% year-on-year to 76 trillion won, and operating profit increased by 52.49% to 13.8 trillion won. Kim Kwanghyun, a researcher at Yuanta Securities, said, "Although there was a variable of performance bonuses, Samsung Electronics' fourth-quarter operating profit fell far short of the market forecast (15.3 trillion won)," adding, "Samsung Electronics' stock price is more closely related to the achievement rate of forecasts than the scale of profits or valuation, and the fact that it fell short of forecasts for two consecutive quarters in the third and fourth quarters of last year will be a bearish factor going forward." SK Hynix's fourth-quarter earnings are also expected to fall short of consensus. Korea Investment & Securities estimated SK Hynix's fourth-quarter operating profit to be 3.9 trillion won, down 7% from the previous quarter, falling short of the consensus of 4.2 trillion won.
However, the business outlook for this year is positive, so the stock price is expected to gain strength going forward. Choi Doyeon, a researcher at Shinhan Financial Investment, said, "The memory semiconductor market is improving faster than expected," adding, "With steady demand for server memory and supply constraints, memory supply and demand are rapidly improving, and prices for both DRAM and NAND are expected to rebound in the second quarter."
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