"People say Samsung will hit 400,000 won and SK hynix 2 million won... Should I buy more or sell?" Retail investors agonize over the weekend

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[The Financial News] As Samsung Electronics delivered an earnings surprise in the first quarter of this year, expectations are also rising for SK hynix, which is scheduled to announce its results on the 23rd.
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According to the Korea Exchange on the 12th, Samsung Electronics and SK hynix, the top two semiconductor stocks by market capitalization, closed the previous day at 206,000 won and 1,027,000 won, up 0.98% and 2.91%, respectively.
After the United States and Iran agreed to a two-week ceasefire, hopes for easing tensions in the Middle East have revived, boosting major domestic semiconductor stocks. Thanks to Samsung Electronics’ first-quarter operating profit of 57.2 trillion won, which far exceeded market expectations, Samsung Electronics and SK hynix have regained the nicknames "200,000 Samsung" and "1 million Hynix."
Geopolitical risks in the Middle East, which had weighed on the market, have eased with the ceasefire. At the same time, expectations are growing that the semiconductor boom cycle will resume, leading to a sharp recovery in investor sentiment.
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In particular, as the won–dollar exchange rate fell below the 1,500-won range, buying by foreign investors stood out. Foreign investors had sold about 64 trillion won worth of shares so far this year, taking profits on semiconductor stocks amid the previously strong won–dollar rate.
Notably, from the 8th to the 10th, after the ceasefire, foreign investors made net purchases of 2.7539 trillion won in Samsung Electronics and 1.37 trillion won in SK hynix in the domestic stock market.
Brokerages are also raising their earnings forecasts and target prices for Samsung Electronics and SK hynix. According to financial data provider FnGuide, the consensus for this year’s operating profit is estimated at 241.0013 trillion won for Samsung Electronics and 175.3176 trillion won for SK hynix.
Reflecting this, SK Securities raised its target prices for Samsung Electronics and SK hynix to 400,000 won and 2 million won, roughly double their current share prices. Han Dong-hee, a researcher at SK Securities, said, "Long-term memory supply contracts will lay the foundation for breaking away from a purely cyclical business," adding, "The idea that memory products can be sold at higher-than-expected prices even during a downcycle needs to be reflected in share prices. If the United States–Iran conflict stabilizes, we expect a strong rebound in stock prices."
He also noted, "Improved structural profit-generation capacity, a weakening of purely cyclical characteristics, and stronger shareholder returns based on these factors will provide justification for a re-rating," and assessed, "This will be the strongest and longest cycle in history, and the journey of memory revaluation is only just beginning."
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KB Securities also projected SK hynix’s first-quarter operating profit at 4 trillion won and raised its target price from 1.7 million won to 1.9 million won. It further forecast that SK hynix, which this year has already climbed to fourth place globally in operating profit, surpassing Microsoft and Google, will rise to third place next year.
Kim Dong-won, Head of Research at KB Securities, explained, "SK hynix’s operating profit is expected to reach 25.1 trillion won this year and 35.8 trillion won next year, lifting its global operating-profit ranking from fourth this year to third next year." He added, "This year’s Dynamic Random Access Memory (DRAM) operating profit is estimated at 20.3 trillion won, five times last year’s level, while NAND flash memory profit is projected at 4.7 trillion won, a 23-fold surge. From the first quarter, the pace of operating-profit growth is expected to enter an acceleration phase."
bng@fnnews.com Reporter Kim Hee-sun Reporter