Thursday, June 12th, 2014
The share price of SK Hynix has shot up to a record-high level this year.
Analysts attributed this to the rising world demand for DRAMs, with the company's strengthened capability in NAND flash memory chips through a series of mergers. It is expected the SK Hynix price to keep going up for a while.
On June 11, the shares of SK Hynix were closed at 47,000 won, down 0.74 percent from the previous day. Nonetheless, this is a price 32 percent higher than the level early in January. This is also close to the historic high of 49,600 won recorded in June 1997 when the company name was Hyundai Electronics.
The rise of the SK Hynix share price is backed up by its financial performance. Last year it posted sales revenue of 14 trillion won and operating profit of 3.4 trillion won, a record-high level. Analysts predicted the company would break the record this year again.
Lee Jeong, Eugene Investment & Securities analyst, said, "On the back of the brisk sales of DRAMs this year and the rapid growth of NAND flash segment, SK Hynix will be able to reach a record-high level again. Its sales and operating profit are predicted to be 16,256.9 billion won and 5,043.1 billion won, respectively, up 1.6 percent and 10.4 percent from the previous outlook." On the same day Eugene Investment adjusted its target price on SK Hynix to 60,000 won from 50,000 won.
Currently the company relies 80 percent of its sales revenue on DRAMs. That means it is highly vulnerable to market volatility. Meanwhile, its global share in NAND flash memories falls short of 13 percent, trailing that of Samsung Electronics (38%), Toshiba (32%), and Micro Technology (17%).