South Korea's top brokerage firm Mirae Asset: Lowers Hynix's target price to 2.8 million KRW, citing a recent sharp drop in stock price despite no significant deterioration in fundamentals

BlockBeats News, July 29th. South Korean semiconductor stocks followed a sharp decline in global chip stocks, with SK Hynix and Samsung Electronics under pressure, and the KOSPI index experiencing intense selling. The market focus has shifted from "How strong is the AI demand" to "Can the valuation hold up and can capital expenditure deliver returns."

Against this backdrop, the South Korean major financial group Mirae Asset released a research report, lowering SK Hynix's target price from 4.2 million Korean won to 2.8 million Korean won, a 33% decrease, but maintaining a "Buy" rating. Based on the closing price of 1.55 million Korean won on July 28th, the new target price still corresponds to approximately 80.6% potential upside.

Mirae Asset believes that this round of correction is more due to the downward shift in industry valuation. Factors such as China's mature process equipment localization, CXMT's IPO, and the expected decline in NAND contract prices have temporarily dampened investor risk appetite. However, the report emphasizes that these variables have limited substantive impact on SK Hynix's future performance estimates.

On the fundamental side, Mirae Asset points out that the Google Cloud order backlog has increased from $46.8 billion to $51.4 billion, and the spot price of 16Gb DRAM has risen for over 50 consecutive trading days and surpassed previous highs, indicating short-term support for memory prices. The bank expects SK Hynix's second-quarter operating profit to reach 6.23 trillion Korean won, a 65.7% increase from the previous quarter.

However, the market will be more demanding going forward. The report states that investors need to focus on the progress of long-term contract signings, whether storage supply will further tighten by 2027, the HBM4 shipment schedule, the implementation of MaaS business, and whether the company will enhance shareholder returns ahead of schedule.

Mirae Asset stated that with strong profitability and financial stability, SK Hynix's recent stock price has experienced a relatively large pullback. For the current market, the signal conveyed by this report is that the AI hardware chain is undergoing a valuation reassessment, but the cyclical prosperity and cash flow logic of the storage leader have not been disrupted.