BNK Investment Securities and Kiwoom Securities lowered target prices for Korean semiconductor stocks SK Hynix and Samsung Electronics on July 8-10, citing concerns over AI infrastructure investment slowdown and memory price growth deceleration. BNK set SK Hynix's target at 1.85 million won on July 10, below the July 9 closing price of 2.186 million won, while Kiwoom reduced Samsung Electronics' target from 430,000 to 390,000 won on July 8. Analysts pointed to weakening AI server demand momentum and anticipated earnings per share (EPS) slowdown in the second half as key drivers. The downgrades reflect diverging views among Korean securities firms on the sustainability of the AI-driven memory supercycle, with target price forecasts increasingly tied to long-term AI investment trajectory assessments rather than near-term earnings.
BNK Investment Securities Sets SK Hynix Target at 1.85M Won
BNK Investment Securities set SK Hynix's target price at 1.85 million won on July 10, according to a report released that day. The report's reference price was 2.076 million won, while SK Hynix closed at 2.186 million won on July 9, up 5.30% from the previous trading day. Analyst Lee Min-hee stated that while AI server DRAM and enterprise solid-state drives (eSSD) remain in supply shortage, hyperscalers' competitive infrastructure investment is no longer as effective as before. Lee noted that considering next year's expected memory and CPU price increases and agent AI model specification upgrades, capital expenditure expansion of at least 30-40% appears necessary next year. However, Lee assessed that the possibility of future investment pace adjustment is growing, creating a gap with current semiconductor company earnings forecasts. Lee interpreted SK Hynix's recent stock price plunge as reflecting demand slowdown, stating that earnings momentum will weaken after year-end and that valuation from next year onward is not at a cheap level. Regarding American Depositary Receipt (ADR) issuance, Lee commented that while it will increase overseas trading convenience, it will not change the original stock's valuation.
Kiwoom Securities Cuts Samsung Electronics Target to 390K Won
Kiwoom Securities lowered Samsung Electronics' target price from 430,000 won to 390,000 won on July 8, reflecting memory price growth slowdown and potential profit growth deceleration from the second half. Analyst Park Yu-ak stated that as memory price growth rates gradually slow and PC and smartphone manufacturers' additional memory purchases are limited, earnings per share (EPS) growth will decelerate from the second half. Park evaluated HBM4 and enterprise SSD (eSSD) competitiveness strengthening positively but kept in mind Chinese memory manufacturers' pursuit and potential industry condition changes. Park's analysis incorporated concerns about the sustainability of memory price increases that have driven recent earnings growth.
Korean Securities Firms Diverge on AI Memory Cycle Duration
The Korean securities industry shows consensus on Samsung Electronics' short-term earnings but diverging forecasts on how long the AI investment-driven memory supercycle will last, according to industry sources. Valuation differences stem from how analysts view mid-to-long-term memory industry conditions rather than short-term earnings. A financial investment industry official stated that currently, the key variable determining target prices is not earnings themselves but how long the AI memory cycle will continue. The official explained that securities firms expecting prolonged AI investment expansion raised target prices, while those concerned about growth rate slowdown took conservative approaches. The divergence reflects uncertainty over whether hyperscaler capital expenditure will maintain current levels or moderate in response to infrastructure capacity buildup.
FAQ
Why did BNK Investment Securities set SK Hynix's target price below the current stock price?
BNK Investment Securities set SK Hynix's target at 1.85 million won on July 10, below the July 9 closing price of 2.186 million won. Analyst Lee Min-hee cited weakening effectiveness of hyperscalers' competitive infrastructure investment despite ongoing supply shortages in AI server DRAM and eSSD, and assessed that the possibility of future investment pace adjustment is growing, creating a gap with current earnings forecasts.
What factors led Kiwoom Securities to lower Samsung Electronics' target price on July 8?
Kiwoom Securities reduced Samsung Electronics' target from 430,000 to 390,000 won on July 8, reflecting memory price growth slowdown and anticipated EPS deceleration from the second half. Analyst Park Yu-ak stated that memory price growth rates are gradually slowing and PC and smartphone manufacturers' additional memory purchases are limited, leading to expected earnings per share growth slowdown from the second half.
