South Korean Stocks Trigger Trading Halts as Japan, Korea Rally; SK Hynix and Samsung Surge
Japanese and South Korean stocks opened sharply higher on July 31, with South Korea’s benchmark Korea Composite Stock Price Index, or KOSPI, briefly surging more than 15%. The Korea Exchange activated its sidecar mechanism for the KOSPI, suspending algorithmic trading for five minutes. It also activated a temporary trading halt for the KOSDAQ, with algorithmic trading suspended for five minutes. SK Hynix briefly rose more than 27%, while Samsung Electronics gained 20%. Regulatory filings showed that Chey Tae-won, chairman of SK Group, bought 3,620 shares of SK Hynix to bolster market confidence. SK Hynix recently reported second-quarter revenue of KRW 79.3 trillion, up 257% from a year earlier, and operating profit of KRW 60.5 trillion, up 557%. Both figures were historical records. Management gave a positive outlook for the second half, expecting third-quarter DRAM shipments to rise about 10% from the previous quarter. It also said the product mix would continue to improve, including HBM4 and 1cnm DRAM. Goldman Sachs held a Korea memory-industry expert webinar on July 28. Participants said traditional DRAM prices would maintain strong, double-digit growth this year. They also said HBM prices could rise sharply or even double next year, that long-term agreements were exerting greater constraints on the market, and that Chinese competitors posed limited threats in the short to medium term. Daiwa said in a research report that SK Hynix’s recent share-price correction had been excessive and reiterated a “Buy” rating. Because valuations across memory-industry peers had been lowered, Daiwa cut its target price-to-earnings ratio by 20%, from 9.38 times to 7.5 times, and reduced its 12-month target price from KRW 3.6 million to KRW 3 million. Japan’s stock market also rallied rapidly. The Nikkei 225 extended its gains, rising more than 4% at one point and moving above 64,000 points.
SK Hynix briefly rose more than 27%, while Samsung Electronics gained 20%.
Regulatory filings showed that Chey Tae-won, chairman of SK Group, bought 3,620 shares of SK Hynix to bolster market confidence. SK Hynix recently reported second-quarter revenue of KRW 79.3 trillion, up 257% from a year earlier, and operating profit of KRW 60.5 trillion, up 557%. Both figures were historical records.
Management gave a positive outlook for the second half, expecting third-quarter DRAM shipments to rise about 10% from the previous quarter. It also said the product mix would continue to improve, including HBM4 and 1cnm DRAM.
Goldman Sachs held a Korea memory-industry expert webinar on July 28. Participants said traditional DRAM prices would maintain strong, double-digit growth this year. They also said HBM prices could rise sharply or even double next year, that long-term agreements were exerting greater constraints on the market, and that Chinese competitors posed limited threats in the short to medium term.
Daiwa said in a research report that SK Hynix’s recent share-price correction had been excessive and reiterated a “Buy” rating. Because valuations across memory-industry peers had been lowered, Daiwa cut its target price-to-earnings ratio by 20%, from 9.38 times to 7.5 times, and reduced its 12-month target price from KRW 3.6 million to KRW 3 million.
Japan’s stock market also rallied rapidly. The Nikkei 225 extended its gains, rising more than 4% at one point and moving above 64,000 points.