April 26, 2024

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[THE INVESTOR] SK hynix decision to spin off its foundry business and along with its efforts to take over Toshiba, will raise its corporate value and be positive for its stocks, said Daishin Securities on May 25. 

The securities firm maintained a “buy” recommendation and 67,000 won (US$59.91) target price. 

In the short term, the parent company will be relieved of capital spending and maintenance costs in thefoundry sector, and will be able to concentrate on memory chip business, said analyst Kim Gyeong-min. 

The chipmaker announced on the previous day that it will invest 343.3 billion won to establish a wholly owned subsidiary SK hynix system IC and hand over its foundry business. 

SK hynix, despite generating most profits in the group, has limited itself to overseas M&As as it falls under regulations that prohibit “grandchild” subsidiaries from owning a subsidiary other than a wholly owned one. SK hynix’ parent company is SK Telecom whose parent company is SK, the holding company of the group. 

Its recent decisions such as the spin-off and seeking to take over Toshiba illustrates the higher status it has secured, noted the analyst. 

By Hwang You-mee (glamazon@heraldcorp.com)