Old memory: DDR4 and traditional flash memory are expected to see strong price increases, and A-share related selling pressure is expected to stabilize (Morgan Stanley)
A Morgan Stanley report pointed out that old memory stocks have recently experienced downward valuations due to cyclical debates, CSP concerns and sell-off of Chinese positions, but DDR4 and traditional flash memory are expected to experience stronger price in
A Morgan Stanley report pointed out that old memory stocks have recently experienced downward valuations due to cyclical debates, CSP concerns and sell-off of Chinese positions, but DDR4 and traditional flash memory are expected to experience stronger price increases and rare pricing power. Key data shows that the monthly price of DDR4 in the third quarter may increase by more than 20% and the quarterly price increase by at least 30%; the quarterly price increase of SLC/MLC NAND and NOR flash memory will reach 50-60% and 30-40% respectively. GigaDevice and others have pulled back sharply, providing valuation support. The market's price increase expectations for DRAM and NAND are relatively cautious, but the report believes that older products will usher in a stronger price increase cycle. The potential trading implication is that it is highlights to use 1.0 times the expected BVPS in 2028 as a reference for downward support for IDM memory stocks in Greater China. Currently, some targets are trading at 1.2-1.5 times, which is attractive. One sentence conclusion: Old memory (DDR4, SLC NAND, NOR) is ushering in a price increase cycle that exceeds expectations. After experiencing a sharp correction, the valuation of A-share related targets has fallen into an attractive range, with bottom-end layout value. Positive/negative: Positive for manufacturers that produce old memory, such as GigaDevice (603986.SH), Nanya (2408.TW), and Winbond (2344.TW). The current stock price has reflected the market's pessimistic expectations for the cycle, but the upcoming strong price increase cycle for its products may be underpriced. Catalysts: 1) Spot and contract price trends of DDR4, SLC/MLC NAND, NOR and other products; 2) Quarterly financial reports from companies such as GigaDevice, verifying the contribution of price increases to profits; 3) Downstream demand, especially driven by the Internet of Things, automotive electronics and other fields.