"Unease and anticipation are just two sides of the same coin": SK Hynix stock pulls back but remains favored by institutions, market focuses on HBM4 technology moat

Odaily News: SK Hynix's stock price has recently seen a pullback. On August 3, the stock fell 8.79%. Although it rebounded slightly by 0.64% and 5.77% on August 4 and 5 respectively, it plunged another 10.37% on August 6, closing at 1.495 million KRW; on August 7, it dropped a further 4.88%, closing at 1.422 million KRW.

Against the backdrop of heightened market volatility, SK Group released an advertisement quoting founder Choi Jong-gun’s famous saying: "Despair and hope are two sides of the same coin; you can turn despair into hope as easily as flipping your palm," and adapted it to: "Unease and anticipation in the AI era are also two sides of the same coin; you can turn unease into anticipation," thereby conveying confidence in the long-term development of the AI industry.

Securities institutions believe that short-term stock price fluctuations have not changed SK Hynix's fundamentals, and the market should focus on its HBM4 technology leadership and the earnings stability brought by long-term supply agreements (LTAs). Specifically:

1. Hyundai Motor Securities expects SK Hynix's DRAM and NAND bit growth to reach 9.7% and 1.5% respectively in the third quarter. As HBM4 sales contributions expand, even with a higher proportion of LTAs, DRAM average selling prices (ASP) are still expected to rise 19.9% quarter-over-quarter. Companies such as OpenAI and Anthropic are advancing plans to build their own hyperscale AI data centers and intend to raise funds for related construction through IPOs. Even if some large tech companies adjust capital expenditures (Capex) in the future, this could be offset by demand from other AI infrastructure. Additionally, regarding competitive concerns over China's CXMT, given the U.S. continued tightening of semiconductor equipment export restrictions, as well as Micron's expansion of domestic U.S. investment, the likelihood of major companies like Apple adopting Chinese memory chips is relatively low.

2. SK Securities is also bullish on SK Hynix's competitive advantages, believing that with its leading position in HBM, partnerships with major North American GPU companies, and AI-driven LTA demand, SK Hynix's market position remains solid. Currently, the HBM supply-demand fulfillment rate is below 70%, and the core value of LTAs lies in ensuring profit sustainability and earnings stability through a "mutual binding structure" between customers and suppliers. With value-reassessment initiatives such as an ADR listing progressing, along with dividend income from the sale of SPC assets related to Kioxia, the company's goal of achieving net cash of 100 trillion KRW may be reached earlier than expected. As shareholder return policies gradually become clearer, this will help the market re-evaluate the value of the LTA model and drive a further re-rating of SK Hynix. (Daum)