April 21, 2024

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[THE INVESTOR] SK hynix’ profits will slowly slide until the first half of next year, said KB Investment and Securities on Oct. 22, lowering the target price to 90,000 won (US$79.39) from 100,000 won.

As expected by market watchers, its third-quarter earnings will be a record high with 11.8 trillion won revenue and 6.3 trillion won operating profit, up 45.4 percent and 69.1 percent on-year, respectively. In the fourth quarter, however, operating profit will decline 6.4 percent to 5.9 trillion won, weighed down by price fall of both DRAM and NAND. Affected by low season and increasing burden of lowering DRAM and NAND prices, its quarterly operating profit will slide until the first half of 2019, said analyst Kim Dong-won.

Concerns over weakening demand for servers following the recent controversy of China’s spy chips and gloomy prospects of PC shipments are undermining investor sentiments. However, its valuation has already returned to the level of two years ago and amply reflects concerns over possible DRAM price decline in 2019, said the analyst maintaining a “buy” recommendation. 

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