SK Hynix Drops Most in 13 Months as CLSA Says Sell: Seoul Mover
Shares in the world’s second-largest maker of computer-memory chips tumbled 8.7 percent at the close, its steepest slide since May 16, 2012. The stock is the biggest decliner in the MSCI Emerging Markets Index. CLSA cut SK Hynix’s rating to sell from outperform, it said in a report today. South Korea’s benchmark index was little changed.
Earnings will peak in the third quarter, CLSA said in the report. Demand for dynamic random access memory chips for personal computers is weaker than what spot prices indicate, it said. The DRAM business accounted for about 70 percent of SK Hynix’s total sales in the first quarter, according to Seong Ae Park, a company spokeswoman.
“Recent experience suggests it will be difficult for SK Hynix’s stock price to increase if the spot price is falling,” Matt Evans, a CLSA analyst based in Seoul, wrote in the report.
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