TLDR
- SK Hynix shares dropped 2% on Thursday after an early rally fizzled out following Samsung’s quarterly report.
- Samsung posted preliminary Q3 operating profit of 107.4 trillion won, a near tenfold jump from last year, though it missed the high end of estimates.
- SK Hynix’s Solidigm NAND arm tapped Goldman Sachs and Morgan Stanley to explore a U.S. IPO worth up to $10 billion.
- A South Korean lawmaker questioned whether the Solidigm listing could hurt current SK Hynix investors.
- Analysts remain firmly bullish, pointing to more than 40% potential upside from current levels.
SK Hynix stock tumbled as much as 2% to ā©1,692,000 during Thursday trading in Seoul. Just hours earlier, the stock had been up 1.5% before the mood shifted fast.
The flip came right after Samsung Electronics dropped its preliminary third quarter numbers. On the surface, the results looked impressive.
Samsung posted an operating profit of 107.4 trillion won. That’s close to ten times what it earned in the same quarter last year.
Revenue reached 195 trillion won for the period. Still, both numbers landed below what Bloomberg’s analyst survey had expected, and that disappointment set the tone.
Samsung itself dropped 2% once the figures hit the wires. The ripple effect spread quickly across Korea’s chip sector.
The KOSPI index slipped close to 2% on the day. Climbing bond yields globally added another layer of pressure on tech stocks.
Solidigm Listing Gains Momentum
Part of the reason SK Hynix didn’t fall further ties back to its Solidigm subsidiary. The NAND flash business has lined up banks for a potential U.S. stock market debut.
Goldman Sachs and Morgan Stanley are set to lead the offering. Reports also name JPMorgan, Citigroup and UBS as additional banks working the deal.
The IPO could pull in roughly $10 billion. Some estimates put Solidigm’s total valuation as high as $100 billion if the listing goes ahead.
Intel’s old flash memory division became Solidigm back in 2021 after SK Hynix bought it. Today it makes large capacity storage drives for AI data centers and cloud platforms.
For now, SK Hynix says nothing is locked in. The company confirmed it’s weighing options but hasn’t finalized a structure.
Not everyone is thrilled about the idea, though. A lawmaker pressed SK Group Chairman Chey Tae-won for more clarity on the plan.
The concern centers on fairness. Critics worry a standalone U.S. listing for Solidigm could leave existing SK Hynix shareholders worse off.
Wall Street Keeps Betting on Upside
Despite the choppy trading, analyst sentiment hasn’t wavered much. Barclays’ Simon Coles reaffirmed his Buy rating with a $300 price target intact.
That target suggests nearly 68% room to run. Coles pointed to tight memory supply as the main driver keeping prices elevated.
Wolfe Research’s Chris Caso bumped his target up to $250 from $200. His Buy rating stayed unchanged alongside the increase.
Caso sees memory demand outpacing supply well into 2028. He also projects enough free cash flow buildup to fund buybacks covering roughly 32% of SK Hynix’s market cap.
Overall, 11 analysts have issued Buy ratings in the past three months. That gives SK Hynix a Strong Buy consensus with an average target of $254.70, implying over 43% upside.
Separately, AMD’s Lisa Su sat down with SK Hynix leadership in Seoul this week. The two sides discussed deepening their AI chip partnership, and SK Hynix’s full Q3 results land October 29.
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