BNK Keeps SK Hynix at Hold With $1,338 Target Below Market Price

Maintains ‘Hold’ but says demand momentum is slowing

SK Hynix Inc. is trading above 2 million won, but one brokerage is still sticking with a target price below the current market level, reflecting a conservative view on the risk of slowing demand for memory used in artificial intelligence servers.

BNK Investment & Securities said in a report released July 8 that it maintained its “hold” rating and 1.85 million won ($1,338) target price on SK Hynix. The firm had raised the target on May 12 and left it unchanged, but with the stock at 2.076 million won ($1,501) when the report was written, some investors viewed the call as effectively close to a sell recommendation. SK Hynix closed at 2.186 million won ($1,581) on July 9, up 5.30% from the previous session.

Lee Min-hee, an analyst at BNK Investment & Securities, wrote that AI server DRAM and enterprise solid-state drives, or eSSDs, remain in short supply. But hyperscalers’ competitive infrastructure spending is no longer as effective as it once was, in his view, signaling slower momentum for AI infrastructure investment.

Given expectations for higher memory and central processing unit prices next year, along with higher specifications for new agentic AI models, capital expenditure would still need to rise at least 30% to 40% next year, Lee wrote. Even so, he said the chances are increasing that companies will moderate the pace of investment, creating a disconnect with current earnings forecasts for semiconductor makers.

Lee also read SK Hynix’s recent sharp drop in the share price as a sign of weakening demand. Earnings momentum is likely to soften after the end of this year, he wrote, adding that the stock’s valuation is not cheap for next year and beyond. On the company’s planned American depositary receipt issuance on July 10, he said the move would improve trading convenience for overseas investors but would not change the valuation of the underlying shares.

BNK, by contrast, maintained a “buy” rating and a 430,000 won ($311) target price on Samsung Electronics Co. Lee wrote that Samsung’s second-quarter operating profit topped market expectations despite the reflection of provisions, and said weaker memory momentum in the second half could be partly offset by improvements in non-memory operations and Samsung Display.

Still, BNK’s view is far from the market consensus. Most brokerages continue to assign SK Hynix target prices well above the current share price. KB Securities said July 9 that “the peak is still far off” and kept its “buy” rating and 4.2 million won ($3,038) target price.

Daishin Securities also raised its target price to 3.9 million won ($2,821) on July 7 and said the company’s Nasdaq ADR listing on July 10 could help narrow valuation discounts. Sangsangin Securities set a 3.8 million won ($2,749) target, NH Investment & Securities raised its target to 4.1 million won ($2,966), and IBK Investment & Securities and Kyobo Securities each lifted theirs to 4 million won ($2,894).

Oh Se-sung, Hankyung.com reporter sesung@hankyung.com