SK Hynix shares experienced significant volatility, recently surging by nearly 30% to 1,718,000 won ($1,203) following news of SK Group Chairman Chey Tae-won's initial purchase of 3,620 shares for approximately 4.79 billion won. This uplift came despite the company reporting an operating profit of 60.5 trillion won for the April-June period, which fell short of the LSEG SmartEstimate of 64 trillion won. Analysts noted that the earnings miss was partly due to slower-than-expected HBM4 shipments, delaying revenue recognition.
Investor sentiment was also affected by the company's lack of a detailed plan for sharing the benefits of the AI boom through higher shareholder returns, with some analysts, like Greg Roh of Hyundai Motor Securities, stressing the need for a concrete policy to improve investor confidence. The stock had previously lost more than half its value since hitting a record high the previous month, though it remained up about 115% for the year.
Market speculation intensified regarding a potential significant increase in dividend yield to about 2.5% based on a 2 million won stock price, and a large-scale stock split similar to what Samsung Electronics did. These rumors were fueled by Chairman Chey's share purchase and the anticipated lifting of US regulatory disclosure requirements on August 4, which had previously prevented the company from releasing material non-disclosed information following its NASDAQ listing on July 10.
Brokerages showed divided opinions, with some, like Korea Investment & Securities, raising target prices for SK Hynix to 4.7 million won, emphasizing corporate value over short-term volatility. Others, such as Mirae Asset Securities, lowered target prices for SK Hynix from 4.2 million won to 2.8 million won, citing concerns over potential oversupply due to competitor capacity expansion and the rise of China's CXMT. Despite the differing views, many maintained a "buy" investment opinion, with Kiwoom Securities raising its investment opinion from "outperform" to "buy" due to increased valuation appeal after recent price declines.
SK Hynix's strong earnings did buoy its net cash to 88 trillion won at the end of June, compared to 63.3 trillion won in gains from investment assets. However, the company has yet to provide specific details on the timing, size, or structure of its shareholder return policy, stating plans to disclose it later this year.
