Samsung Electronics, SK Hynix Rebound Sharply After Slump; Next Week Tests Staying Power

Samsung Electronics Co. and SK Hynix Inc. rebounded sharply after a steep selloff, turning attention to whether the gains can continue next week. The key question is whether the move proves to be only a short-term technical bounce or the start of a broader upswing backed by second-quarter earnings expectations.

According to Hankyung Epic AI on July 4, Samsung Electronics rose 8.22% on July 3 from the previous session to close at 309,500 won. SK Hynix jumped 10.88% to 2.425 million won. Both stocks clawed back part of the losses from the previous week's slump.

Samsung Electronics fell to 281,500 won in weekly trading between June 29 and July 3, marking an 8.84% decline for the week. It then surged more than 8% on July 3 alone to reclaim the 300,000-won level.

The first point to watch next week is whether Samsung Electronics can hold above 300,000 won. Expectations for second-quarter results are supporting the stock's downside. Sangsangin Securities forecasts second-quarter revenue of 178.3 trillion won and operating profit of 83.9 trillion won.

Rising memory prices are another key variable. Kyobo Securities said the Device Solutions division is driving earnings. It estimated average selling prices for DRAM rose 46% from the previous quarter, while NAND average selling prices climbed 58%.

For SK Hynix, the focus is whether it can stay above 2.4 million won. The stock climbed to 2.764 million won in weekly trading on June 19. It then corrected to 2.045 million won in weekly trading on July 3 before rebounding sharply the same day to 2.425 million won.

SK Hynix's stock momentum hinges on high-bandwidth memory, or HBM, and a US American depositary receipt listing. NH Investment & Securities projects second-quarter revenue of 85.3 trillion won and operating profit of 66.2 trillion won. Formalizing a US ADR listing is also being cited as a factor that could broaden access for overseas investors and support a re-rating.

The gap between analyst targets and current prices also remains wide. Samsung Electronics has an average target price of 495,800 won, implying 60.2% upside from the July 3 close. SK Hynix has an average target of 3.442 million won, leaving a 41.9% gap.

Investor flows remain a variable. Retail investors have recently absorbed foreign selling and bought heavily into products tied to Samsung Electronics and SK Hynix. Buying has also poured into single-stock leveraged exchange-traded funds.

Falling client cash balances are a headwind. Investor deposits, money waiting on the sidelines of the stock market, slipped below 120 trillion won for the first time in two and a half months. If retail buying power weakens, the rebound in large semiconductor stocks may also lose momentum.

There is also concern about the pace of the recent rebound. SK Hynix has posted strong gains this year. Some analysts say institutions and foreign investors may continue to sell to rebalance holdings. As the stock rises, selling could emerge as investors adjust portfolio weightings to stay within allocation limits.

Lee Song-ryeol, Hankyung.com reporter yisr0203@hankyung.com