BNK Keeps SK Hynix Target at $1,340 Even as Stock Climbs to $1,584

Maintains Hold Rating, but Says Demand Momentum Is Slowing

A brokerage has issued a target price below SK Hynix Inc.’s current market value even as the stock trades above 2 million won, underscoring a cautious view that demand for memory used in artificial intelligence servers may slow.

BNK Investment & Securities on July 8 maintained its hold rating on SK Hynix and kept its target price at 1.85 million won ($1,340), according to the securities industry on July 9. The firm left unchanged the target it raised on May 12. Given that the stock was at 2.076 million won when the report was written, some investors interpreted the call as effectively close to a sell recommendation. SK Hynix closed at 2.186 million won 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, momentum behind AI infrastructure investment is easing.

Lee said expectations for higher memory and central processing unit prices next year, along with rising specifications for new agentic AI models, mean capital spending would still need to increase by at least 30% to 40% next year. Even so, he said companies are increasingly likely to moderate the pace of investment, creating a gap with current earnings forecasts for semiconductor makers.

He also viewed SK Hynix's recent sharp share-price decline as reflecting softer demand. Earnings momentum is set to weaken after year-end, he wrote, adding that valuations are no longer cheap from next year onward. 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 Investment & Securities was more positive on Samsung Electronics Co., maintaining its buy rating and 430,000 won target price. Lee said Samsung's second-quarter operating profit beat market expectations despite the impact of provisions. Slower memory momentum in the second half could be partly offset by improvements in non-memory operations and Samsung Display, he added.

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 on July 9 that the stock is "still far from the top" and maintained its buy rating and 4.2 million won target price.

Daishin Securities also raised its target price to 3.9 million won on July 7 and said a valuation discount could ease with the company's Nasdaq ADR listing scheduled for July 10. SangSangIn Securities set a target of 3.8 million won, NH Investment & Securities set 4.1 million won, and IBK Investment & Securities and Kyobo Securities each raised their targets to 4 million won.

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